Relentless pressure weakens grain prices further

Grain prices came under further pressure today (15 September) as markets continued to respond to the latest US Department of Agriculture (USDA) report, which raised estimates for wheat and maize production and stocks.

UK feed wheat futures have lost £7.20/t in eight days, falling this morning by 75p/t to £111.70/t for November.

Global wheat production was revised higher by 3.9m tonnes in the USDA figures, mainly because of higher production in the EU (up 3.1m tonnes to 150.9m tonnes) and Ukraine (up 2m tonnes to 24m tonnes).

World demand for wheat is also expected to rise by 3.2m tonnes to 710m tonnes but this is not enough to offset the increase in production.

World maize output is expected to rise slightly to 987.52m tonnes, with US production up 2.6% to a record 365.7m tonnes on higher yields. However, this will be largely offset by a drop in Chinese output because of drought.

Despite a slight rise being predicted for world maize consumption, the global stocks-to-use ratio will rise slightly, too.

The most dramatic boost from the US figures was for soya beans, with the 2014-15 forecast for global production at 311.13m tonnes, almost 6.5m tonnes higher than the previous estimate.

This put the stocks-to-use ratio at 31.6%, meaning end-of-season stocks are forecast to represent 31.6% of global demand.

Frontier Agriculture reported today in its bulletin that just 46% of its French wheat is 220+ hagberg compared with 99% last year.

Other UK grain market factors included a strengthening of sterling and heavy availability of feed wheat as growers sought to place what they could not store as harvest drew to a close for most.