The grain market has had another firm week with global maize and wheat prices rising on tight supply of the former and growing demand for the latter.
US ethanol production has expanded to near record levels as demand for road fuel increases, while US exports are gathering pace, also to record levels, said analyst CRM Commodities.
The gains in this market have helped strengthen wheat prices further, with the London May 2022 feed wheat futures contract at £222/t at Friday lunchtime (29 October).
New crop has gained, too, with the November 2022 contract at £193/t, having been well above £190/t for most of the past two weeks.
Around the regions, ex-farm feed wheat values (29 October) in a price survey by Farmers Weekly ranged from £200/t-£213/t for November collection, and averaged £204.75/t. This was up almost £6 on the week.
Release of the AHDB’s first UK balance sheet with supply and demand information also firmed things up, showing wheat opening stocks at the lowest level this century, supporting the tight supply outlook.
Total availability of wheat is expected to be up 18% on last season with production at 14m tonnes and imports above average at 1.7m tonnes.
The Vivergo Fuels bioethanol plant is expected to come back online early next year, adding to demand, while total usage by flour millers is currently forecast as relatively flat on the year, said AHDB Cereals and Oilseeds.
Jonathan Lane, ADM Agriculture’s head of grain trading, said that expected declines in Russian and European exports from early in the new year continue to support the global market outlook, as the Australian harvest commences amid reports of heavy rains.
“Global prices should also remain supported well into 2022, as dryness concerns across the US southern plains and the Black Sea region remain,” said Mr Lane.
“Surging prices do mean EU supplies are losing export competitiveness, although exports will rise compared with last year, factoring in a bigger EU crop.”
EU soft wheat shipments have reached almost 9m tonnes by late October, compared with 7.23m tonnes last year.