13 November 2018
Grain markets drifted sideways last week (5 to 9 November) in the run up to the USDA World Agriculture Supply and Demand Estimate (WASDE) release on 8 November. In response to this, grain markets across the board ended the week lower.
The USDA data placed global maize stocks-to-use up to 27.2%, from 14.4% a month earlier. The change was driven by revisions to the Chinese maize stock numbers, up 254.7%. However, this masks the true sentiment of the market with the more important figure, global stocks-to-use minus China, up marginally (0.1%) on the month at 11.9% .
Brazilian agency Conab reiterated their expectations of another large maize harvest in 2018/19 of 90-91Mt. However, this is 3.5-4.5Mt less than the USDA estimate. The Conab report released on 8 November highlighted that climatic conditions for maize and soyabeans are favourable. Any changes in the maize area in South America will be important to the grain market sentiment going forward, particularly with bumper crops forecast for both Brazil and Argentina.
Oilseeds markets saw mixed activity last week. Chicago soybean futures ended the week stable, recovering ground on Friday (9 November) from losses made in the run up to Thursday’s USDA estimates. In contrast, Paris rapeseed futures climbed last week, following a drop in French area estimates for next season’s harvest. However, UK delivered rapeseed prices still fell last week due in part to strengthening sterling.
The French rapeseed area for the 2019 harvest is expected to drop by 30-35% due to the drought, according to the French Federation of Oilseed Crop Producers (FOP) (Reuters). This decrease would reduce the French rapeseed area to between 1.0-1.1Mha. If realised this would place the planted area some 0.4Mha-0.5Mha below 2018/19 levels.