Stronger demand stabilises grain markets

Grain markets have stabilised slightly this week, with stronger buying demand and hopes of a euro rescue package supporting international values.

London wheat futures ended the week to Tuesday (29 November) unchanged at £144.50/t for January, with ex-farm supplies pegged at about £139/t for spot movement. New crop prices improved slightly, to about £135/t ex-farm for November 2012.

“Market operators are increasingly concerned by the situation in the southern hemisphere,” said a report by analyst Agritel. “Rains are threatening crop quality in Australia, where production estimates bet on bumper crops this year. Rainfalls are also causing delays in soya bean plantings in Argentina, but weather conditions are to improve in the coming weeks.”

Drought was also affecting Ukraine, Bulgaria, Romania and Poland, which could have implications for cereal and oilseed rape crops. However, old crop rapeseed markets remained under pressure, ending the week to Tuesday down by £3/t, to about £339/t ex-farm.