US forecast settles grain market fears

Grain markets have remained relatively stable over the past week, with a bullish report from the US Department of Agriculture offsetting ongoing economic concerns.

The USDA report forecast global wheat production to be 677m tonnes this year – a drop of 17m tonnes on last season. Combined with a 9m-tonne increase in demand, end stocks should erode to give a healthy stocks to use ratio of 27.4%, said a report by the HGCA. Global maize production was set to grow by 75m tonnes, to 946m tonnes. “However, with demand forecast 5.8% higher, end-stock growth may be limited, giving a stocks-to-use ratio of 16.5% – so remaining finely balanced.” London wheat futures ended the week to Tuesday at £149/t for November – 65p down on the week.

Oilseed rape markets continued their volatile run, easing £2/t to average £355/t ex-farm for spot movement and dropping about £10/t for harvest, to about £342/t, depending on location. The USDA report confirmed historically low American soya bean stocks, but forecast an 8% jump in global oilseed production this harvest, to a record 471.5m tonnes. However, a rise in consumption meant ending stocks would only rise by 2.9m tonnes, to 65.6m tonnes – 15.8m below 2010-11.

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