By Olivia Cooper
WHEAT and rape markets have dropped after favourable weather forecasts in the USA.
Prolonged drought in the grain-producing mid-west area of the USA had pushed Chicago prices up and domestic prices followed.
But rain is now forecast, and the corn, wheat and soya complex all fell at the end of last week, with soya oil slumping 5% to US$0.1735/lb (54.88/t).
Speculative selling on the futures markets, both in the USA and here in the UK, also put pressure on values, and rape has fallen 2/t to about 148/t ex-farm for harvest.
But Banks Cargill expect the US Department of Agriculture to reduce their projected yield for soya, which is currently pegged at a high 39.5 bushels/acre.
“The crop is in considerably poorer condition than last year.
“We may therefore be seeing a smaller crop than presently forecast, and it is for this reason that we remain bullish in the short term.”
Consumer demand for wheat is still strong, says the companys Richard Whitlock: “But as farmers get ready to start harvest, they are not inclined to do much selling.”
Feed wheat has therefore eased 1/t from recent contract highs to 79/t ex-farm for November.
On a more positive note, for the second week running, the European Commission granted 283,000t of unsubsidised wheat exports at their weekly management meeting.
This could suggest a willingness in the commission to allow exports of EU grain to Third Countries, especially when it is not costing the taxpayer a penny.
But the HGCA says the refusal of a 500,000t standing tender (the daily tender system) reveals some concern about the predicted lower European cereals output this harvest.
“With only 7-8m tonnes of surplus wheat to export from the EU, for Brussels to grant half a million tonnes per week would not add up,” says the HGCAs senior economist Gerald Mason.
“I would expect the commission to be a bit cautious on exports until they have a better idea of what the harvest will bring in,” he adds.