Wheat prices fall signalling start of seasonal lull
Grain markets have eased over the past week, with a seasonal lull in activity allowing wheat prices to slip by £2/t to about £213/t ex-farm for spot movement.
However, fundamental supply and demand remains tight, with the EU likely to benefit from North African export demand as Black Sea exports start to run out. Global crops remain in the spotlight, with Australia’s wheat production forecast to drop from 29m tonnes last year to 17.9m tonnes, according to the Commonwealth Bank of Australia.
“There are also signs that Argentina may have issues, with early reports of barley yields being below expectations, which may be replicated in wheat,” said Nick Tapp, partner at Bidwells consultants.
“The weather in the southern hemisphere still has its part to play, as crops are not yet in the barn,” he added.
“The wheat may be in the ground in the northern hemisphere, but it is dry in the USA, wet in the EU and Russia, with the Ukraine needing more snow cover to protect the crops over the next few months. As stocks remain perilously low, there is little capacity for things to go wrong.”
Oilseed rape values remained unchanged on the week, at about £365/t ex-farm.
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