Northern Ireland weekly market report - 6 January 2025

6 January 2025

Grains

Wheat

Unfavourable weather in the US and Russia, plus maize concerns in Argentina offer support to prices short-term. But harvest pressures in the Southern Hemisphere may limit longer-term price gains.

Maize

Supply concerns from hot, dry weather forecast in Argentina are offset by a larger Brazilian maize crop and weaker US export demand.

Barley

Barley prices are following the maize market for now, with planting intentions and spring weather conditions set to influence the longer-term outlook.

Global markets

Grain markets were mixed last week (Friday 27 Dec to Friday 3 Jan). Both Chicago wheat and maize futures (May-25) dropped by 2.8% and 0.7% to close at $198.76/t and $180.41/t respectively. The decline was driven by a stronger US dollar, technical selling, and weaker-than-expected US export sales data. Meanwhile Paris milling wheat futures (May-25) gained 0.4%, closing at €236.75/t on the reduced euro against US dollar.

The US dollar reached a two-year high on Thursday (first trading day of the year), driven by expectations of stronger economic growth. This added pressure to wheat prices despite earlier support from forecasts of unfavourable weather in the northern regions.

The USDA's weekly export sales report for the week ending 26 December, released on Friday, shows wheat net export sales of 141 Kt, which were significantly below market expectations ranging from 200 Kt to 500 Kt, according to a Reuters pre-report poll. Maize net export sales totalling 777 Kt also underperformed market expectations, which had ranged between 800 Kt and 1.4 Mt.

Winter wheat conditions in Russia are being closely monitored. The state weather agency reported warmer-than-usual temperatures and excess moisture, leading to continued sprout growth in key producing regions of Central and Volga. This continued growth in winter is not ideal. Russia is the world's top exporter, and winter wheat accounts for a large part of its wheat production.

Persistent hot and dry weather in Argentina is raising concerns about the maize crop, which is in a crucial development stage. Weather forecasts suggest these conditions may last until mid-January. While Argentina is expected to exceed its 2023/2024 output, prolonged drought could cause significant crop damage.

Consultancy firm StoneX has revised its forecast for Brazil’s 2024/25 maize production, raising it to 128.6 Mt from the previous estimate of 128.3 Mt. This upward revision is attributed to an expansion in the area planted with maize, which is expected to contribute to higher overall production.

UK focus

UK feed wheat futures (May-25) closed at £190.75/t, down £0.75/t on the week (Friday to Friday), while new crop futures (Nov-25) gained £0.30/t, ending at £193.00/t. The May-25 domestic wheat futures failed to tracked Paris prices up due to strengthening of sterling against the euro (LSEG).

Oilseeds

Rapeseed

Limited supply provides some support for rapeseed prices in the short term. However, expectations of a record soyabean crop in Brazil weighs on the oilseed complex longer term.

Soyabeans

Soyabean markets find some short-term support from the US crushing pace, wider vegetable oils complex and weather worries in Argentina. However, larger estimates of the soyabean crop in Brazil weighs on the longer-term outlook.

Global markets

Chicago soyabean futures (May-25) were very volatile during the holidays but gained 0.3% across the week (Friday 27 Dec – Friday 3 Jan). Technically, Chicago soyabean futures (May-25) closed last Friday slightly above the strong support / resistance level of $10/bshl.

The main supporting factor for soyabean oil is the historical discount against palm oil. This and adverse weather in Argentina also support soyabean prices. Argentina is the world's largest exporter of soybean oil and meal has forecast a very hot period without favourable precipitation in the short term.

However, forecasts of a large soyabean crop in Brazil, active soybean sales by US farmers and the strong US dollar pressured the market. In addition, the upcoming inauguration of US President-elect Donald Trump and China's GDP growth in 2025 are concerns for US soybean exports.

Net US soyabean export sales totalled 0.48 Mt for the week ending 26 December 2024, down 49% from the previous week and below the trade estimates, ranging from 0.5 Mt to 1.2 Mt. The monthly USDA’s Fats & Oils report showed 6.3 Mt soyabeans crushed for crude oil in November 2024, compared 6.0 Mt in November 2023.

Indonesia’s B40 biodiesel programme has thrown the global vegetable oil market into uncertainty. Indonesia is delaying the start of its B40 biodiesel mandate from 1 January 2025, due to technical issues in the implementation. Market participants will have until 28 February to adapt to the B40. But the government has been working to increase the mandatory biodiesel blend to 50% from 2026.

StoneX raised its 2024/25 Brazilian soyabean production forecast to 171.4 Mt (December USDA forecast was 169 Mt) from 166.2 Mt, due to an increase in area and yield. In StoneX expects 2024/25 soybean exports will rise from 103 to 107 Mt. Next Friday will see the release of the USDA’s January WASDE report and a key watchpoint will be the soyabean production forecasts for the 2024/25 marketing year in Brazil and Argentina.

Rapeseed focus

Paris rapeseed futures (May-25) fell €2.25/t (0.44%) across the week (Friday-Friday) to close at €512.25/t. The Nov-25 contracts gained €9.00/t to close at €470.00/t. Old crop contracts and new crop contracts moved in different directions due to the high difference between the crops and worries about prospects of global rapeseed production in 2025 year.

Winnipeg canola futures (May-25) rose 0.83% across the week (Friday-Friday). Re-positioning by speculative traders helped support prices, though unpredictable demand for rapeseed oil and meal from Canada to US put pressure on the market.

In Ukraine, UkrAgroConsult forecast an increase in sunflower area for the 2025 crop, but a decrease in soyabean and rapeseed area compared to the 2024 crop.