Grain prices have slipped for a second week after wetter weather in the US improved crop prospects and forecasts pointed to an increased acreage of maize planting. 

In the week ending 21 May UK feed wheat futures had slipped from a 52-week high of £217/t for the May 2021 contract to £201.50t. Milling wheat prices on the Paris (MATIF) exchange were at €211.75/t (£182.07/t) for September 2021 deliveries, down from a 52-week high of €233.50/t (£200.73/t).

Selected UK ex-farm values also showed an easing of prices, with May feed wheat values at £198.50/t in the far north-east of the UK and £190/t in the Home Counties. Milling wheat values stood at £205/t in the West Midlands area for May deliveries.

Grain traders ADM Agriculture said markets had continued to ease in the wake of the US Department of Agriculture (USDA) crop prospects report, released last week.

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It suggested an end to a prolonged dry spell had improved crop growth forecasts. For Kansas, which has the biggest wheat area in the US, reports suggested the crop had withstood recent low temperatures and was thriving.

The upbeat reports were added to by a Wheat Quality Council release which put potential yields at a 20-year high.

The positive news meant investors had sold off stocks, fearing higher supply levels would weaken forward prices.

This sell-off could continue in the short term as weather turns more favourable, ADM grain trader Jonathan Lane said.

However, he questioned whether the effect would be long lasting.

“There is still a lot of weather to get through, especially given that more recent historical crop losses have been caused by adverse weather during June and July,” Mr Lane said.

With global stocks set to remain tight throughout 2020/21 and well into 2021/22, crops in the ground will need to deliver, so the longer-term fundamental outlook remains supportive, he added.

In the EU and UK the likely size of the combined wheat crop has been lifted to 145.8m tonnes, from 141.5m tonnes under the previous estimate, with strong prospects for harvests in the Balkans and Spain.

The UK wheat crop prospects show a marked improvement, now estimated at 14.6m tonnes -14.8m tonnes, compared with 14.2m tonnes a few weeks ago, Mr Lane said.

Given the forecast of sharply higher domestic usage, the UK is looking at a tight scenario at the end of this current season, supporting nearby values, he added.

Grain trader Cofco International said market analysts were also watching the rapid pace of crop plantings in the US as an influence on yields.

While the dry weather held back growth initially, good ground conditions means drilling is well ahead.

This could see larger crop areas for 2021 compared to last year when planting was dogged by bad weather, ultimately limiting the area grown. 

Corn is 80% completed compared with a five-year average of 68%, soya beans were 61% complete against a 37% average, and wheat was 85% drilled, up 14% on previous years, Cofco suggested.

While the markets have had a bad few days, it is harder to tell whether this is a correction or if prices will move upwards once the impact of the USDA reports rescinds, said a spokesman. 

Meanwhile oilseed rape markets were subject to more aggressive selling and saw values drop to levels last seen in early May.

ADM Agriculture’s Will Ringrose, said US weather remained favourable, with rain in the forecast until the weekend, before turning warmer in the next few weeks.

Canadian canola plantings are still under way, with rain making its way across the major growing regions, Mr Ringrose said. Prices on old crop remain just off all-time highs, while new crop futures traded sharply lower, following other agricultural markets.

Paris Matif rapeseed traded back close to highs at the start of the week, but closed €14/t (£12.03/t) down midweek to €528.50/t (£453.95/t) on the August position, he said.