Better weather in US puts pressure on grain prices

Grain prices have come under pressure this week on an improving weather outlook for US crops.

The EU harvest is promising in yield terms, but with quality questions being raised as heavy rain continues in many countries.

“Northern France, eastern Germany and Poland continue to see significant rainfall, which may hamper progress for the coming harvest,” said Jonathan Lane, head of grain trading at ADM Agriculture.

See also: Creditors’ report reveals devastation of grain trade failure

However, yield expectations remain positive, with the EU remaining on course for a potential record wheat crop.

Mr Lane said: “Initial reports from France suggest adequate quality is likely in the early harvested crop. However, intermittent rain is slowing progress and causing quality concerns, although it is too early to tell if this is the start of a wider trend.”

At lunchtime on Friday (9 July), London’s November feed wheat futures contract was down by about £5/t on the previous week’s close, at £166/t.

Black Sea rains

In the Black Sea region, recent rains had been favourable for new crops, although there had been torrential downpours in Ukraine, said Mr Lane.

“Overall though, with a drier outlook in the 15-day forecast, the weather continues to support an outlook of large cereal crops across this region.

“In the short term the outlook for big EU/Black Sea wheat crops could be the catalyst for some further downward pressure on prices through harvest.”

A US Department of Agriculture (USDA) global supply and demand update due out on Monday could move prices either way.

Chinese maize estimates

While there is always uncertainty about the reliability of Chinese market figures, AHDB Cereals and Oilseeds said the USDA’s latest increased estimate for the country’s 2021 maize crop, and higher-than-expected stock levels, were also factors in the downward grain price pressure.

AHDB planting survey

Meanwhile, the results of the AHDB planting survey confirm GB grain areas moving back to trend levels after the forced big swing to spring cropping last season.

The GB wheat area is up 26% on 2020, at an estimated 1.74m ha.

Other key numbers are:

  • GB spring barley area estimated at 769,000ha, down 28% on 2020
  • GB winter barley area estimated at 350,000ha, a 15% increase on 2020
  • GB oilseed rape area estimated at 322,000ha, down 15% on 2020
  • GB oat area estimated at 211,000ha, a 1% increase on 2020
  • Skyfall is the most popular wheat, at 12% of total wheat area
  • Laureate is the most popular barley, accounting for 26% of the total barley area.

Online grain trading made easy with Farmers Weekly Graindex

It takes just a couple of minutes to create a listing on Farmers Weekly Graindex and you’ll get a range of prices to compare from active buyers who want your grain.
Visit Farmers Weekly Graindex

Online grain trading made easy with Farmers Weekly Graindex

It takes just a couple of minutes to create a listing on Farmers Weekly Graindex and you’ll get a range of prices to compare from active buyers who want your grain.
Visit Farmers Weekly Graindex