4 March 2018
The majority of UK market drivers last week were of global origin.
Markets were boosted by the deluge of data last Thursday afternoon. The US prospective plantings data came out in favour of soyabeans, which will have contributed to the boost in maize prices. The US stocks data, also released last week, was in line with industry expectations potentially contributing to Chicago wheat futures being down on the week in dollar terms. Meanwhile, a weaker sterling contributed to grain futures markets firming across the board in sterling terms last week (Friday 23 March – Thurday 29 March).
US farmers intend to plant 2% less maize than in 2017, at 35.6Mha, according to the prospective plantings data released by the USDA last Thursday. Plantings of maize were 1.7% below industry expectations in a pre-report Reuter’s poll.
US wheat planting intentions are up 3% on the year at 19.1Mha, the second lowest planted area on record, going back to 1919. The area intended to be planted to wheat is 2% higher than industry estimates from a pre-report Reuter’s poll. The increase in wheat area is driven by increased intentions of spring wheat plantings, up 15% on 2017, at 5.1Mha.
In a short trading week, global oilseed prices rose between Friday 23 and Thursday 29 March, but stocks data released by the USDA, on Thursday caused US soyabean prices to fall on Monday. Meanwhile, US soyabeans appear to have escaped initial tariff increases by China.
US soyabean stocks, as at 1 March, are estimated at approximately 57Mt a 21% increase year on year (yoy). Drawdown in soyabean stocks was 34Mt between 1 December 2017 and 1 March 2018, down 9% yoy.
The US prospective plantings report released by the USDA on 29 March estimated a 1% fall yoy in the area intended to be planted to soyabeans. However, any potential upward pressure caused by this data has been mitigated in part by increased stocks, which continue to weigh on the market.