Grain markets jump on weather and crop reports

A nervous pre-harvest grain market has risen by £10/t in a week.

The London feed wheat futures November contract reached £135.50/t on Wednesday (1 July), after a series of weather and crop reports from around the world.

Old crop wheat, where high stocks are overhanging the market, also rose to put spot ex-farm prices in a range from £118/t-£124/t.

New crop feed wheat prices range from £119-£125/t ex-farm, as available.

The US markets have led the rise, with maize and wheat futures there reaching six-month highs on the release of statistics showing slightly lower than expected US maize stock and planting figures.

Continued wet weather in the US Midwest is leading to concerns for winter wheat quality. Rain is delaying the winter wheat harvest, along with maize and soya bean planting, while some Canadian crops desperately need rain.

US wheat stocks and acreages were estimated higher than expected but the Chicago wheat futures market gained almost £10/t in a few hours after the release of the figures.

“While conditions appear to be favourable for US spring wheat crops, the lower Canadian area and weather concerns, combined with quality concerns for the hard red winter crop due to wet weather, could tighten total availability of high protein wheat from North America next season,” said Arthur Marshall, analyst at AHDB Market Intelligence.

Hot dry weather in Europe has also been a factor in local price rises which could have been higher in the UK were it not for the euro continuing to fall against sterling.

Other recent grain market influences include a report from Statistics Canada showing lower than expected wheat sowings, coupled with very dry weather in key production areas.  

The International Grains Council also recently cut its global wheat harvest forecast by 4m tonnes to 711m tonnes. This is just 2m tonnes short of IGC’s expected global wheat consumption figure but high stocks means there will still be more than enough wheat to meet global demand.

The EU’s Mars crop monitoring report slightly cut expectations for  EU 2015 wheat yields to 5.85t/ha, while EU trade group Coceral put the union’s soft wheat production at 140.6m tonnes, up 2m tonnes from its last estimate but down on the 2014 crop of 148.3m tonnes.

Barley output was forecast down 3.5m tonnes year-on-year at 56.7m tonnes. Maize was also forecast to fall by just over 8m tonnes on 2014 to 65.7m tonnes.

Oilseed prices have also been boosted by a fall in the condition of US soya bean crops and a lower than expected stocks figure from the US. However stock levels are still 54% higher than at the same time last year.

New crop oilseed rape prices ranged on Wednesday from £252/t- £264/t ex-farm, as available.

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