Market report: Grain prices tumble as USA boosts harvest estimates

Grain and oilseed prices have tumbled this week, following the latest report from the US Department of Agriculture. It surprised traders with a forecast of record US maize and soyabean crops, despite adverse harvesting weather, as well as higher maize and wheat ending stocks.

The report put US maize production at 334m tonnes – 2% higher than its previous estimate and almost 9% higher than the 2008/09 harvest. It also increased its soyabean forecast by 1% to 91m tonnes – more than 13% above last year. US maize and wheat ending stocks were also higher than expected, with global wheat supplies raised by 2.5m tonnes.

A separate report predicted that 2010/11 US winter wheat plantings would drop by 14% to their lowest level in almost a century, at 37m acres. But with this leaving more land available for soya and maize plantings, markets failed to draw much support, and have dropped sharply.

London wheat futures fell by more than £3/t in the week Wednesday, to £105.50/t for January as Farmers Weekly went to Press (Wednesday), with November futures down by over £4/t to £110.50/t. French oilseed rape futures reacted similarly, dropping by €14/t in the week, to €278.50 for January, and by €15/t to €286/t for November.