Cut in Russia’s wheat prospects pushes market higher

Further cuts to expectations for Russia’s wheat crop boosted grain values again this week.

The recent successive reductions to crop size, along with an uncertain outlook for the UK and continental European harvests, continue the roller-coaster grain ride that is expected to lead up to harvest.

London’s November 2024 feed wheat futures contract stood at £224/t at midday on Wednesday 22 May, up £3/t on the day and £9/t higher than the previous week’s close.

The latest Russian wheat crop estimate of 83.5m tonnes comes from Moscow-based agricultural consultant Ikar and compares with its 86m tonne estimate of the previous week and 93m tonnes just a month earlier.

See also: Weather to set the tone for grain market until harvest

The chief issues are lack of rain in the south and frost in central Russia. Ikar said heavy rains in Siberia could hamper spring wheat sowings, but could also support yields of crops that have already been drilled.

It cut Russia’s overall grain crop forecast to 132m tonnes (down 3m tonnes on the week) and its total grain exports outlook to 57m tonnes (previously 59.5m tonnes).

Adding to the mix are conflicting reports on the prospects for Ukraine’s crops, according to grain market adviser CRM AgriCommodities, with some analysts reporting notable hot and dry weather damage, while the country’s state weather forecaster said the setback had been minimal.

Mike Verdin, senior market analyst at CRM, said prices had risen across the board, but UK values had lost a bit of ground in comparison with the French market.

He suggested that this could be because the prospects for the UK crop had improved slightly whereas this was not the case for the French harvest.

Farmgate values

Ex-farm harvest feed wheat values had gained £10/t as Farmers Weekly went to press on Wednesday. This put them in a range from £205/t in the south to £225/t in Scotland.

Old crop gained £2/t compared with a week earlier, although in a very wide price range. The spot trade average was just a few pence under £195/t ex-farm.

However, the rise in prices has led to little more farmer selling, say traders, as growers hope for further increases.

Oilseeds

In contrast to the rise in wheat values, oilseed markets lost ground on news that US soyabean sowings have progressed well, along with a slight dip in crude oil prices resulting from the potential for interest rate concerns to restrict demand.