6 June 2018
Global grain markets were under downward pressure early last week (25 May – 1 June) with progress being made planting US spring crops and wetter weather forecast.
The decline in US grain futures was stalled however, by news of dry weather affecting crops in the Black Sea region. In Europe, less substantial market movement was observed as futures largely reacted to the US news.
News of incoming rain reduced upward pressure on US wheat futures at the mid-stage of last week. Most of the crop is now in the ground and forecast rain could help development of the spring crop. Last week’s USDA crop progress report also revealed positive news for maize, wheat and barley with planting for all three exceeding the five year average. Maize condition ratings were also positive with 79% rated as good or excellent compared to 65% in the same period last year.
Crop development news out of Canada was less positive last week. Vegetation growth index maps released by Statistics Canada as of 27 May showed that dry weather is hampering development in the majority of the Prairies, a major wheat growing region.
Dry weather in Ukraine during April and May may have hampered grain yields this season, according to the head of the Ukrainian state weather department. Rainfall for April and May was only 53% of expected volumes. Yields for both winter wheat and winter barley were predicted to fall 0.3t/ha from year earlier levels, to 3.8t/ha and 3.1t/ha respectively.
EU production forecasts for common wheat, barley and maize have been cut slightly from end-April estimates by the European Commission. Despite the growing season for the 2018/19 crop getting off to a good start in Western Europe with favourable conditions for the most, these forecast declines may reflect some growing dryness concerns in Central and Eastern Europe.
Global oilseed futures declined last week as downward pressure on Chicago soyabeans fed through into other markets. Trade uncertainty once again pressured markets as expanding US metal tariffs caused friction with major trading partners, whilst no clear outcome emerged from US-China negotiations.