Market Overview
Wheat / Barley / Maize
New Year, same key market drivers!
Competitive & abundant wheat supplies from Russia continue to weigh on the market despite some concerns over safety for shipments in the Black Sea.
Last week a bulk carrier was struck by a Russian sea mine which raised doubts over the safety of exports out of Ukraine.
As of 29th December, Ukraine have exported 17.93MT of grains and pulses in 2023 according to the Ukraine Ministry of Agriculture. This is 1.3 times down from this time last year.
Excessive rainfall has delayed winter cereal planting for many before Christmas. In the UK, new crop futures are pricing for tightening wheat supply next season. Poor planting in other parts of the EU have also been seen due to the exceptionally wet weather.
In South America, despite a mixed maize crop in Brazil, Argentina’s maize crop is performing above average.
The mixed picture for the development of the first maize crop in Brazil is dues to some regions experiencing irregular rainfall & high temperatures. Other areas could benefit with further rainfall. Overall production figures in Brazil could be cut if conditions continue.
However, favourable growing conditions in Argentina could potentially offset some loss of maize production in Brazil, Argentina maize planting has increased to 77.6% complete, above 70% seen this time last year and 97.5% of the crop is in normal/excellent condition.
As planting intensions & weather conditions for spring become in greater focus, this will influence the market outlook for barley which currently is trading at a £15 discount to wheat.
Hi Pro Soya / Rapemeal
Significant rains across northern parts of Brazil have largely eased yield concerns for soybeans and has contributed to market pressure. The rainfall is forecast to continue for the coming days.
Some Agr consultancies have revised the Brazilian crop down to nearer 150MT than 160MT. Increases to production in Argentina (+23MT) and Uruguay (+2.2MT) are likely to offset some of the potential losses in Brazil.
Reports suggest US soybean planting could grow with planting intentions for new crop approaching. Trade figures suggest soybeans could be favoured over maize according to the AHDB. Large US soybean areas could possibly weigh on prices this spring.
Downward price potential for rapeseed is more limited long term if supplies from the EU are lower for harvest 2024. The general market sentiment will largely be dictated by soybeans.
