15 May 2018
Global grain futures markets fell across the board last week.
The decline was led by US wheat futures, which fell in anticipation and then after the release of the latest USDA report, despite the ongoing US dry weather concerns. In Europe, declines were smaller for UK feed and Paris milling wheat futures. This was partly influenced by US movements, but also an improving picture for European crop conditions.
The stocks of key global crops have been projected to be tighter both this and next season, with maize and wheat set to record a decline in 2018/19. In the May USDA report, maize stocks are forecast to decline 18% in 2018/19, to 159.2Mt. In addition, growth in global domestic consumption is forecast to exceed production.
Global ending stocks for wheat are projected to decline for the first time in six years in 2018/19, to 264.3Mt. This is largely a result of early projections for lower Russian production.
However, US markets fell on the back of increased US production forecast for wheat, rising by 5% to 49.6Mt in 2018/19. This, coupled with a higher than anticipated US maize ending stocks in 2018/19 (42.7Mt), highlighted the relative abundance of grain supplies.
European crop conditions have seen an improvement for the majority of soft wheat and winter barley crops (Strategie Grains). Following the delay to planting observed across much of Europe in early spring, conditions have improved. Crop yield potential is now looking better in Spain, France and Italy, helping to weaken European prices.
Global oilseed markets diverged once again last week (Fri 4 May to Fri 11 May) with Chicago soyabean futures falling as trade tensions between the US and China continued to provide downward pressure on the soyabean markets. Paris rapeseed new crop futures rose on the week with concerns of the impact of the cold wet spring in Europe. In the domestic market, UK delivered rapeseed also rose on the week.