Market Overview
Wheat / Barley / Maize
DEFRA have released their 1st UK production estimates. Wheat is estimated at 14.1MT, down from 15.5MT harvested in 2022. Barley is projected at 7MT, down from 7.4MT harvested in 2022. The UK average spring barley yield has reduced year on year, driving the production cut.
In this months USDA report, 2023/2024 wheat ending stocks were in line with expectations. The Australian wheat crop was reduced by 1.5MT to 24.5MT.
Markets will continue to monitor the situation between Russia and Ukraine. Ukraine exports have been slow due to strikes on the port of Odessa and Danube. Any further disruption could cause prices to find support. However, Russian wheat remains competitive in the global market and remains bearish news for world wheat.
Barley continues to track the wider grain complex, currently trading at an £8 discount to wheat. Argentina and Australia are forecast to account for one third of global barley exports so a smaller crop could affect prices going forward.
This weeks USDA crop progress report estimates the US maize harvest at 34% complete. The condition scores remain at 53% rated good/excellent. The swift harvest has kept pressure on global grain prices.
Ukraine’s 2023 maize crop is projected at 28MT, down 14MT from 2012.
The USDA report projected maize 2023/2024 ending stocks at 312MT, 800KT lower than expectations. Dry weather in the Southern Hemisphere threatens to reduce the Argentine maize area, if there are any delays or reductions to plantings, the maize outlook could shift.
Hi Pro Soya / Rapemeal
Current domestic Hi Pro Soya prices remain firm. Dry weather in South America this week has given support to global prices.
This weeks USDA report projects the Brazil soybean crop for 2023/2024 at 163MT, up from 156MT seen in 2022/2023. Argentina are look set to recover from last seasons production of 25MT with the USDA estimating a production of 48MT for 2023/2024. A bumper South American crop could put pressure on prices if realised.
The US soybean harvest is currently estimated at 45% – 50% complete with yields reported as positive. Soybean prices could come under pressure when harvest is complete and the markets have a clearer picture on yields and production.
DEFRA reports a drop of 154KT on UK rapemeal harvest from the harvest in 2022 due to poor yields. However this has been offset by increases in the EU 2023 harvest from 19.1MT to 19.6MT. This is due to a high carry over in stocks and an increase to Ukraine and Russian supply.
A key watchpoint for rapemeal will be the Australian crop. Australia had the driest September on record. It is expected the crop could drop from 8.1MT to 5.2MT. Australian rapeseed accounted for 34% of global exports in 2022/2023. This would drop to 23% for 2023/2024 if realised.
