Meat & Livestock News

UK Grain Futures Remain Unaffected by US Market Fluctuations


Despite recent price increases in the Chicago grain markets, UK feed wheat futures have not followed the same trend. The UK and European grain futures have remained relatively stable, with the sterling-dollar exchange rate showing variability as key economic data from the US is awaited.

UK Market Stability

As of 1:00 pm on Friday, 6 October, November 2023 UK feed wheat futures were trading at approximately £185.00 per tonne, a slight decrease of £0.35 from the previous day’s close.

The stability in the UK market is attributed to the strengthening of sterling against the US dollar, which has offset any potential gains.

Factors Influencing Global Grain Markets

Several factors are expected to impact the grain markets in the coming weeks, including the next US maize and soybean yield estimates from the USDA, scheduled for release on 12 October.

US Market Trends

In the US, Chicago wheat and maize prices have risen due to a combination of weather concerns, geopolitical tensions in the Black Sea, and technical trading.

The UK government’s warning about Russia’s mining activities in the Black Sea has heightened concerns about shipping risks, particularly given the strong wheat exports from Russia.

Weather Concerns in the Southern Hemisphere

Australia has experienced its driest September on record, leading to concerns about further reductions in wheat output.

Argentina is also facing dry weather conditions that are affecting its wheat and maize crops. The Buenos Aires Grain Exchange estimates that 14% of the planned maize area has been planted as of 4 October, with more rain needed to meet the forecast.

Technical Trading and Speculative Activity

Technical trading signals and speculative activities have also contributed to the price rises in the US. Chicago wheat futures for December 2023 broke above the 20-day moving average, while maize futures settled above the 50-day moving average.

Speculative traders, who held large net-short positions in these futures, have also engaged in short covering, adding to the upward price momentum.