Market Overview
Poor weather conditions dominate markets this week!
adverse weather conditions in the US gave support to grain and oilseed prices at the start of the week. Continuing drought conditions across the main soybean and maize producing states drove markets higher.
The dryness in the US plains saw US spring wheat crop ratings fall 9% to 51% Good/Excellent. Forecasts remain dry until the end of June and weather conditions for July will be a key watchpoint.
Another area of concern for wheat is the continuation of the Black Seas Grain corridor. Russia have stated their unhappiness in regards to the set up of the deal and continue to express their intention not to renew beyond July unless the situation changes.
The flooding seen in Ukraine appear to have had minimal impact on global markets. The Kakhovka Dam which was destroyed at the start of June has flooded the area near the city of Kherson. South of the Dnipro river has been under Russian Military control with Ukraine forces controlling north of the river. The markets have seen little impact to grain prices which is likely due to the lack of planting in the area this year with the south banks under Russian control. Longer term we expect damage to these areas and possible impacts on future planting.
Downgrades have also been made to the Russian spring crop conditions, representative of 35% of total production.
The US Midwest is reported at 57% drought conditions and has caused US maize crop ratings to drop 6% from last week to 55% Good/Excellent. For now forecasts remain dry until early parts of July, continued dryness will have negative impact on yields.
Barley continues to track wheat and maize prices. The UK 2023/2024 crop is estimated to be at 7.2MT, down 3% from last year. The EU crop is projected at 49.9MT and global projections are at 148MT.
Hi Pro Soya prices have risen sharply from the end of last week. This was predominantly due to the weather conditions in the US. Illinois, Iowa and Minnesota account for 35% US soybean production. 49% of Iowa is suffering from drought conditions with Illinois suffering with 65%. We anticipate further volatility going forward if the drought conditions continue.
Brazil is still expected to produce a record soybean crop with the USDA projection 2023/204 production at 163MT.
Rapeseed price have gained support from rising soybean prices. Longer term, a large EU crop is expected to weigh on global prices.
