Grain prices dip on latest USDA reports

Grain prices have fallen on higher-than-expected crop stock and area figures in the US Department of Agriculture’s latest reports. Some UK wheat futures contracts lost as much as £5/t after the figures were released yesterday.

This morning half of the losses had been recovered, with May 2102 wheat futures at £156/t and ex-farm spot wheat prices at £145 to £150/t, depending on area.

Maize stock figures were the biggest surprise and although the stocks on 1 December were lower than at the same time a year earlier, the levels were higher than the market had expected.

The USDA reports had a significant effect on markets, but many of the big trading houses still thought there was more maize about than the official stats showed, said Fengrain managing director Rob Munro.

Maize price falls in Chicago hit their daily limit, while US wheat prices fell by £10/t. Soyabean prices were down too. UK price falls were limited by sterling weakening to £1=€1.195 after opening the day at £1=€1.205, according to the HGCA.

The USDA increased its estimate for world wheat stocks at the end of the current season by 1.5m tonnes to 210m tonnes, about 10m tonnes up on last season from a world crop expected to be about 2.5m tonnes higher than last year.

An increase of about 400,000ha in the US wheat area contributed to the pressure on the markets.

“The UK is still exporting very healthily and UK stocks could be tight at the end of this season,” said Mr Munro.

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