Muted UK reaction to world grain stock estimates

UK grain markets were relatively quiet on Friday after the US Department of Agriculture released its latest estimates of world supply and demand on Friday.

The January 2011 London feed wheat futures price had put on £2.60/t to £174/t delivered on a low volume before the USDA figures were released. Mid afternoon saw the May 2011 contract at £206.25/t delivered, up by 75p/t.

The trade had expected the US maize stocks estimate to be reduced further than was the case. Even so, HGCA analysts point out that the stocks to use ratio for this grain, at 4.5% is still extremely tight, representing less than three weeks’ average use.

“The wheat market sees a mixed picture with global stocks higher and yet EU stocks lower after higher exports,” commented HGCA. “The outlook for wheat remains mixed with markets very focused on new-crop growing conditions rather than old-crop export market, and so the maize balance sheet looks set to remain the influential global grain market driver.”

Uncertainty over the size of the Brazilian soya bean crop coupled with lower plantings in the US would mean continued volatility in the oilseeds market, said HGCA.