Grain markets have dropped again, with nearby London feed wheat futures reaching their lowest level since December 2011.
July futures closed at £147/t on Tuesday (27 May), with November futures at £144/t – their lowest since early February.
“Easing tension in Ukraine, as well as encouraging planting conditions in the EU, have pushed prices down,” said a report by the HGCA.
In addition, long-awaited rain in the US winter wheat belt should, if not boost yields, prevent them worsening further.
“Rain is also forecast for the US spring wheat region, although conditions will be drier as the week progresses, so planting should be able to continue.”
In Argentina, the government had increased its estimate of maize output for 2013-14 from 29.8m tonnes to 31.1m tonnes, and forecast wheat plantings of 4.5m ha in 2014-15 – up from 3.6m ha this year. “Unless demand responds, the prospect of stronger global grain supplies continues to support the current bearish market trend,” said the HGCA report.
Oilseed rape markets were also under pressure amid good new crop prospects across Europe. However, with US soya bean prices rising due to tight stocks, European rapeseed was looking increasingly competitive on export markets, which could support demand.