Mid-week market update: Grain market daily

• UK feed wheat futures (May-25) ended yesterday’s session at £161.30/t, up £0.30/t from Monday’s close. The Nov-25 contract settled at £182.60/t, down £0.40/t over the same period. Domestic markets (old crop) followed global futures down yesterday, driven by favourable weather conditions. Find out more on this below.
• Paris rapeseed futures (Nov-25) closed at €474.00/t yesterday, down €5.75/t from Monday’s close. The drop followed wider losses in the vegetable oil complex, with Chicago soyabean oil (Dec-25) and Winnipeg canola futures (Nov-25) falling by 2.0% and 1.6% respectively. Also, weaker crude oil prices are making vegetable oils a less attractive option for biodiesel production.

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Weather in key grain and oilseed producing regions continues to be a big factor as crops hit important growth stages in the Northern Hemisphere, while harvest continues in South America. On top of this, ongoing uncertainty around global demand is still affecting the market. So, what impact has this had on prices this week?

Northern Hemisphere

In the US, recent rains helped to improve winter wheat crop ratings made by the USDA in weekly report on Monday, which led to a drop in wheat prices. Chicago wheat futures (May-25) fell to a new low of $185.81/t, while Paris milling wheat futures (May-25) dropped to €202.75/t. Drought in the US Plains has been a concern lately, especially as the winter wheat crop reaches a key growth stage. However, forecasts of more rain in key states such as Kansas, Oklahoma, Montana, and Washington could help boost crop conditions.

Crop conditions across Europe and the Black Sea region are generally looking favourable after recent rainfall in some areas. However, the warm weather in northern France and a cold snap in Russia are still a concern as they could affect crop development.

South America

Good weather in South America puts further pressure on maize and soyabean prices. Chicago maize and soyabean futures (May-25) fell by 4% and 1% respectively since Friday. Recent rainfall in Brazil has helped ease drought concerns that had been threatening the country’s second maize crop (safrinha). Forecasts suggest temperatures will ease into early May, with more heavy rainfall expected in Mato grosso, Brazil’s top maize producing state. Over in Argentina, a dry spell could help get the maize and soyabean harvests moving again after recent heavy rainfalls made field work tough.

Global demand uncertainty

Ongoing doubt about global demand, largely due to the lack of clarity around US-China trade negotiations, continue to underpin the market. Reports indicate that China plans to cut grain use in livestock feed to 60% and reduce soymeal content to 10%, as part of efforts to reduce reliance on soybean imports, particularly from the US (LSEG). This will be something important to keep an eye on in the coming months.

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