16 October 2018
Movements in grain markets were small but mixed last week (8 Oct - 12 Oct).
UK futures markets dipped with a stronger sterling-euro exchange rate. Meanwhile, Chicago maize gained last week on a reduced outlook for US maize production in Thursday’s (11 Oct) USDA WASDE.
World wheat production was scaled back 2.1Mt in last Thursday’s (11 Oct) WASDE report, reflecting concerns over production of Australian wheat, down 1.5Mt. There was also a 1Mt decline in Russian production. The market reaction was somewhat muted, suggesting these losses had already been priced in.
US maize production was also scaled back 1.3Mt by the USDA, on reduced yield expectations. Production in other key exporting regions was unchanged (Argentina, Brazil and South Africa). However, the Brazilian production estimate is above the official Conab one. US and Southern Hemisphere maize production forecasts will be watched closely in the coming months, with any further tightening likely to impact prices.
In the UK, production of all major cereals (wheat, barley and oats) fell in 2018/19 according to the latest Defra figures released on Friday. The production numbers for wheat and barley were covered in last week’s Market Report. However the report from last Thursday (11 October) highlights a 7.7% fall in spring barley production, to 3.9Mt, and a 2.1% fall in oat production to 0.86Mt.
Chicago soyabean futures (Nov-18) fell during the week before rising on Friday, following slight cuts to US production estimates. Meanwhile, Paris rapeseed futures (Nov-18) fell during the week, due in part to forecasts of higher global rapeseed production.
Global oilseed ending stocks in 2018/19 are expected to increase 2.0Mt, to 123.8Mt according to the latest WASDE. Despite forecast rises in global soyabean and rapeseed production, estimated oilseed production in 2018/19 is expected to remain largely unchanged at 603.9Mt, a 0.7Mt reduction from last month’s estimate.