02 October 2018
Grain markets (Nov/Dec-18) moved lower last week to various degrees.
European wheat markets (Paris and UK) drifted lower with little news to drive any significant movement. Chicago wheat (Dec-18) dropped more considerably, as a result of the higher than expected stocks figures, released on Friday and the US dollar firming towards the end of the week. Maize prices also declined.
Both US wheat and maize stocks as at 1 September were above the average of industry expectations, in figures released by the USDA on Friday. US maize stocks were down 7% on the year at 54Mt. However, the stocks figure was 2% above the top end of industry expectations from a pre-report Reuters poll, and as a result largely bearish for markets. Wheat stocks were estimated just under 65Mt, up 5% on the year.
Total grain (wheat and coarse grain) availability was revised up in the latest IGC estimates, released on Thursday. The revision driven by increased maize production prospects for the US (+6.1Mt), the EU (+2.7Mt) and Ukraine (+1.2Mt). Total maize stocks held by the major exporters (Argentina, Brazil, Ukraine and US) were revised up more than 5%. Increased world supply will add pressure to world grain markets.
A raft of domestic data is due over the next couple of weeks, starting with the first estimates of the Scottish cereal harvest on Thursday, along with August UK usage data. UK provisional wheat and barley production numbers are due from Defra on Monday 8 October. This will be followed by crop area data for Scotland and the UK on 9 October and 11 October, respectively.
Last week the end of season 2017/18 balance sheet was released for the UK, pointing to the lowest wheat stocks since 2013/14. The final AHDB/ADAS harvest report was also released on Friday, providing a round up of the 2018 harvest.
Last week, Chicago soyabean futures (Nov-18) rose during the week before losing ground on Friday, on the back of higher than expected US stocks. Meanwhile, Paris rapeseed prices (Nov-18) jumped €10.60/t over the week, due in part to continued tightness in EU rapeseed supply, strengthening of the US dollar against the euro and increased biodiesel demand. Globally for rapeseed, continued drought in Australia and a slow start to the Canadian canola harvest may have also lent support to markets.