Grain markets drift further

Grain markets drifted further this week, following confirmation that Russia has re-entered the export market with sales of 180,000t of wheat to Egypt.

This was Egypt’s first purchase of Russian wheat for a year, and at a $20-30/t (£12.50-18.80/t) discount to EU and US offers, pulled international markets lower.

As Farmers Weekly went to press, [replace this bit online as “on Wednesday 13 July,”] spot feed wheat was pegged at about £164/t ex-farm, with barley narrowing the gap to £148/t, depending on location.

Harvest is progressing across Europe, with yields generally better than expected. It is likely that grain markets will follow yield developments closely in the coming weeks. US maize development would also be important, said analyst Rabobank, as the US Department of Agriculture had failed to take account of potential yield losses in its latest world supply and demand estimate.

“The USDA is currently forecasting the third highest yield on record, despite significant planting delays and recent adverse conditions. This needs to be monitored closely and viewed as a bullish risk for the 2011/12 balance sheet.”

The USDA report provided a positive surprise for the corn market, with ending stocks below expectations. “Carryover stocks for world corn, wheat and soya beans are forecast to decrease year on year, illustrating the tight fundamental outlook.”