US shutdown pressures international grain markets

International grain markets remain under pressure, following a bearish USDA report and the financial shutdown in the US.

Monday’s USDA report put US corn and soya bean stocks above traders’ expectations, despite being 17% lower than the same time last year. And the latest IGC report estimated global 2013-14 wheat production to reach 693m tonnes – 38m tonnes more than last year and 2m tonnes more than its prevous estimate, due to larger crops in the EU and former Soviet states.

Canada was expecting record wheat yields of 3.3t/ha, but this appeared to have diluted protein levels, with initial quality results for Canadian Red spring wheat coming in below average, said a report by HGCA.

Global wheat plantings for 2014-15 were tentatively forecast 2.3% higher than 2013-14, at 225.4m ha. However, frosts had hit Argentina’s wheat areas, slowing growth and potentially damaging the crop, it added. This had supported wheat markets, while maize values remained under pressure. “A wider spread means maize is more competitive into feed rations, and if it persists then it could be detrimental for feed wheat demand.”

UK markets ended the week to Wednesday about £1/t firmer, at around £150/t ex-farm for spot feed wheat.

Market report