02 January 2018
In a week disrupted by Christmas and New Year, trade has been subdued with weather having the largest influence on markets. In general, European grain markets (Paris & London) have fallen slightly on the week, while Chicago futures made modest gains. In oilseed markets there were mixed fortunes, with Chicago soyabeans (May-18) making a small gain, while Paris rapeseed (May-18) declined.
The weather in Ukraine is abnormally warm for the time of year, with regions finding temperatures to have deviated by 5°C to 9°C above average, leading to the possibility of winter sown crop damage. The abnormally mild weather has been reducing the protective snow cover, leaving crops at risk when cold weather returns (read more here).
The German winter wheat area sown for 2018 harvest has fallen to 2.98Mha, a decrease of 4.7% year on year (YoY). The figures released by the German statistics authority, Destatis on 21 December, also showed the total area sown for winter cereals to be down 2% YoY (read more here).
In their final 2017 UK crop areas and yields report, Defra revised the UK wheat production to 14.84Mt, down by 326Kt from the provisional production estimate published in mid-October (read more here).
Recent above average rainfall in key soyabean growing regions in South America has provided some relief for crops, although the extent varies by region. In Centre West Brazil (Mato Grosso, Mato Grosso do Sul, Goias), rainfall for the season to date (28 Oct – 01 Jan) is around 10% behind “normal” (Reuters). Meanwhile in Argentina, cumulative rainfall is about 40% behind normal, with rainfall in recent weeks improving sowing conditions (read more here).
Brent Crude prices hit a two and a half year high last week (read more here), at $66.87/ barrel on 29 Dec. The uplift in crude prices provides some support to the value of soya oil, with soya oil the primary feedstock for US biodiesel. Chicago Soya Oil prices were slightly firmer on Friday 29 December, up 1% on the week.