Monday, 30 October 2023
The grain and oilseed markets have seen a series of fluctuations this week, influenced by both UK and global events.
Grains Overview:
Wheat, Maize, and Barley:
Short-term grain markets are displaying volatility, reacting to updates on South American weather and Black Sea exports. In the long run, the abundance of global feed grain supplies is anticipated to put downward pressure on wheat prices.
The weather in South America, particularly drought conditions in Argentina, is currently a focal point for maize markets. Barley prices are expected to follow the broader grain market trends, with heavy maize supplies potentially influencing overall feed grain markets.
Global Grain Markets:
Last week, global grain markets experienced a slight downturn. Chicago wheat futures for December 2023 fell by 1.8%, while Paris milling wheat futures for November 2023 dropped by 3.2%.
This decline was primarily attributed to beneficial rains in Argentina and the continued flow of competitive exports from the Black Sea region.
Drought conditions in Argentina are affecting maize plantings and the wheat crop’s development. However, recent rainfall in key wheat-producing regions, such as Cordoba and Santa Fe, has been beneficial. The Buenos Aires Grain Exchange reported a slight improvement in the wheat crop’s condition.
In Brazil, concerns are growing over the potential impact of scarce rainfall on the Safrinha (second) maize crop, which will be planted at the beginning of 2024. Both Brazil and Argentina are forecasted to receive minimal rainfall in the upcoming week.
Black Sea supplies, particularly from Ukraine, continue to influence grain markets. Despite temporary disruptions in Ukraine’s ‘humanitarian corridor’, grain exports resumed last week.
However, Ukraine’s grain exports for October have nearly halved compared to the previous year.
UK Grain Market:
UK feed wheat futures for November 2023 closed at £187.20/t, a decrease from the previous week. Domestic wheat futures mirrored global price trends, with Russian exports and Argentinean rains influencing prices.
UK delivered prices for feed wheat and bread wheat also followed this downward trend.
The 2023 Cereal Quality Survey results were released on Friday, revealing a decline in the quality of wheat and barley harvested in the UK this year. The percentage of wheat meeting the UK Flour millers group 1 specification dropped significantly from the previous year.
Oilseeds Overview:
Rapeseed and Soyabeans:
Short-term market dynamics in soyabeans are influencing rapeseed prices. However, if a substantial South American soyabean crop emerges, it could exert pressure on the oilseed markets.
Weather conditions in Brazil are critical for the soyabean market, with dry conditions in Northern Brazil affecting plantings. Despite this, widespread rains are forecasted for the region in the coming days, which could alleviate some concerns.
Global Oilseed Markets:
Chicago soyabean futures for November 2023 experienced a slight decline over the week. The US soyabean harvest’s rapid progression and increased demand for US-origin soyabeans influenced the market.
The focus remains on Brazil’s weather, with the next few weeks being crucial for the region’s soyabean crop.
Rapeseed Focus:
Paris rapeseed futures for November 2023 saw an increase over the week, influenced by forward soyabean markets and palm oil futures. Domestic rapeseed prices in the UK also reflected these trends.
