US figures confuse grain business

By FWi staff

THE world grain market is confused and uncertain, following the release of the US Department of Agricultures latest assessment of world supply and demand.

“The latest figures have created a mixed picture and it doesnt make analysis next season any easier,” says Gerald Mason of the Home-Grown Cereals Authority.

The US balance sheet looks much tighter, which is positive for world prices – indeed there has been a slight increase since the figures were released, says Mr Mason.

Wheat production has been revised down from 60.5mt to 53.4mt producing a significant reduction in end season stocks, down from 22.5mt to 16mt.

However, the world balance sheet looks far less tight due to significant revisions to Chinas stocks.

Wheat stocks are up from 14mt to 54mt, maize from 32mt to 80mt and rice from 20mt to 95mt.

“But data from China is notoriously susceptible to inaccuracies and manipulation, which adds to the confusion.

These upward revisions reduce the chance of price rises, but no-one is confident of the figures.

“China is still a wild card and the focus is on the positive US situation rather than the price depressing factor,” says Mr Mason.

Trevor Harriman of Dalgety says the effect of these latest figures on UK prices has been fairly muted.

“Values are very much being driven by domestic considerations and are ignoring outside influences.

“UK wheat is significantly more expensive then French so we cant export, but it is possible that there will be no need to.”

Old-crop feed wheat is worth about 80/t ex-farm, with new-crop wheat for November about 80.50/t.

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