Tuesday, 30 June 2020
- Chicago maize futures for Dec-20 gained $3.74/t to $131.79/t (£107/t) yesterday, after the contract hit its lowest level to date on Friday. Prices bounced due to short covering and re-positioning by speculative traders ahead of tonight’s USDA reports, despite a slight week-on-week improvement in US maize crop condition scores.
- Chicago wheat futures were also boosted by speculative traders re-positioning. Gains were capped by the progress of wheat harvests across the Northern Hemisphere.
- UK feed wheat futures followed the US trend higher and were further boosted by sterling weakening against both the US dollar and euro. The Nov-20 contract gained £3.50/t to close at £166.50/t, while the Nov-21 contract gained £1.95/t to £152.35/t.
- Tonight (5pm BST) the USDA will release the results of its survey on how much wheat, maize and soyabeans have been planted for harvest 2020, plus stock levels as at 1 June. According to polls by Refinitiv, analysts expect a modest area switch from maize to soyabeans from March’s report and declines in wheat, maize and soyabean stocks.
Canadian acres could weigh on barley prices
UK feed barley prices could face further pressure in 2020/21 after data shows Canadian farmers have planted the most acres to barley since 2009. At 3.04Mha, the area is 1.4% larger than last year and 102Kha more than they signalled they intended to plant in the March survey. The increase from March is attributed to better potential returns compared to other crops, particularly oilseeds, by Statistics Canada.
Global barley supply forecasts are already looking very comfortable and depending on yields, the additional Canadian acres could further swell the global crop and put pressure on prices. Using the March data, Agriculture and Agri-Food Canada (AAFC) forecast the 2020 Canadian crop at 9.6Mt, down 8% from 2019. The USDA currently forecast the crop at 9.7Mt.
Global barley stocks are set to reach their highest level since 2015/16 in 2020/21 according to the USDA earlier this month. If a larger Canadian crop is harvested it would likely add to the pressure on global barley prices and make the export environment the UK will need to compete into tougher.
Results for other crops:
- Wheat excluding durum was planted on 7.80Mha, down 283Kha from March intentions and down 2.2% from 2019. In contrast, the total wheat area is up 1.5% year on year because of more durum wheat being planted.
- Canola (rapeseed) area is 8.41Mha, 66Kha higher than the March survey. However, this area is still 0.8% down from 2019, likely linked to high global supplies of oilseeds and issues shipping Canadian canola to China.
- The oat area was broadly unchanged from March at 1.55Mha, up 6.5% year on year and the highest since 2008.
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