01 May 2018
Global grain futures firmed last week (20 April – 27 April).
The key driver of prices over the past week has been continued US dryness concerns, both for its impact on current winter wheat conditions and for its impact on maize planting. UK new crop (Nov-18) wheat futures movements were largely dictated by global markets.
Dryness in the US southern Plains has elevated concerns over the prospects for US Hard Red Winter wheat according to Reuters. Areas of Texas, Kansas and Oklahoma are subject of “extreme” or “exceptional” drought according to the US Drought Monitor and concerns over the impact this has on winter wheat yields is growing. Conversely, cold and wet weather in the Midwest continues to delay maize planting.
Looking ahead to 2018/19 for the UK, with the wheat planted area anticipated to decline again, it is difficult to make an argument against another tight supply and demand balance. This could well support UK prices above the world level for another season, unless we see strong yields, imports or domestic demand is lower.
Global oilseed markets (Chicago soyabean and Paris rapeseed) saw slight increases last week (Friday-Friday). Chicago soyabean futures rose as a result of an increase on Friday (27 April), caused in part by rising worries over dry weather in key crop states in the Midwest. Increasing expectations for US soymeal exports has also firmed prices following the difficult Argentinian season.
Expectations for Canadian rapeseed planting were forecast down 7% year-on-year to 8.7Mha in 2018 according to a survey from Statistics Canada. However, some traders expect that the final rapeseed planted area will be higher, predicting a 9.6Mha planted area in a Reuters poll.