Market Overview
Grain prices have seen fluctuations this week, with UK feed wheat futures for November 2023 closing at £184.00 per tonne, a decrease of £2.55 from the start of the week. Similarly, futures for November 2024 closed at £198.55 per tonne, down by £2.50.
Meanwhile, Paris rapeseed futures for November 2023 closed at €419.75 per tonne, a decline of €6.50, and the contract for November 2024 closed at €445.00 per tonne, down €5.00.
Global Factors
Global grain prices have been volatile recently. Initial support earlier in the week, influenced by investor concerns over the attack on Israel by Hamas, was offset by the impact of abundant supplies from the Black Sea region.
The market is also awaiting updates from the upcoming USDA World Agricultural Supply and Demand Estimates (WASDE) report.
Black Sea Supplies
Russian wheat exports are exerting downward pressure on global markets due to low prices and a second consecutive bumper harvest. According to Refinitiv, Egypt’s state buyer GASC recently purchased 480,000 tonnes of Russian wheat in a private deal, likely at around $265 per tonne FOB for November and December shipping.
Russian agriculture consultancy IKAR has revised its forecast for Russia’s grain crop this season to 141.2 million tonnes, up from 140.0 million tonnes, with exports also increasing to 64.5 million tonnes from 64.0 million tonnes.
Ukrainian Exports
Ukrainian President Zelenskiy is currently in Romania discussing Black Sea security. Romania is becoming crucial for the transit of Ukrainian grain, and a corridor is expected to be established soon for grain movement to Romania via Moldova.
Wheat exports from Ukraine in September totalled 1.23 million tonnes, down 31.4% from the same period last year.
US Maize Harvest
The USDA’s latest crop progress report indicates that the US maize harvest is 34% complete, up from 23% the previous week and ahead of the five-year average of 31%.
The condition of the crop remains stable, with 53% rated as good or excellent, aligning with last year’s 54% rating. Markets are keenly awaiting any revisions in the upcoming WASDE report.
Oilseed and Other Commodities
Despite a rise in Chicago soybean futures (up $7.25 per tonne), Chicago soybean oil futures fell by $2.14 per tonne. Weaker currencies in Ukraine and Russia are boosting sunflower seed and oil exports, putting pressure on the broader oilseed complex.
Brent Crude oil futures also saw a slight decline, closing at $87.65 per barrel, down $0.50 from the start of the week.
Looking Ahead
With the WASDE report due shortly, analysts expect the US maize yield to be revised down to 10.89 tonnes per hectare from September’s estimate of 10.91 tonnes per hectare. Any deviations from these expectations could influence price movements, making it a key factor to watch in the coming days.
In summary, this week’s grain prices have been influenced by a range of factors including Black Sea supplies, geopolitical concerns, and upcoming agricultural reports. The market remains volatile, and stakeholders are advised to keep an eye on upcoming data releases.
