Key factors influencing grain prices this week: Grain market daily

• UK feed wheat futures (Nov-24) closed yesterday at £182.40/t, down £0.05/t from Monday’s close. The May-25 contract rose £1.25/t over the same period, ending the session at £196.75/t.
• While competitive supplies from the Black Sea continue to weigh on the European wheat market, Chicago wheat futures were up yesterday on technical buying and short covering ahead of the USDA’s World Agricultural Supply and Demand Estimates (WASDE) due out on Thursday.
• Paris rapeseed futures (Nov-24) ended yesterday at €463.25/t, down €5.00/t from Monday’s close. The May-25 contract closed at €466.25/t, also down €5.00/t over the session.
• European rapeseed prices followed soyabeans futures down yesterday on repositioning ahead of the WASDE report as the soyabean crop condition rating in the US holds steady.

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Global grain markets have fluctuated lately due to a combination of factors such as adverse weather, cuts to production estimates, rising global demand, export dynamics and trade tensions. We reviewed these factors in detail below.

Adverse weather

The recent dry weather in the US Midwest has notably influenced global grain prices. The percentage of US crops in drought has noticeably increased as of late, with 13% of the maize area now under drought conditions. Also, drought has led to a downward revision in crop yields in Europe (see below). Another factor to watch is the hot and dry conditions in central Brazil. This could delay soybean planting and potentially push back the second maize planting.

Production revisions

Following reduced crop yield estimates by the EU crop monitoring service (MARS) on 26 August, the EU commission revised its August crop estimates downward for wheat, maize and barley compared to July. Similarly, LSEG today reduced its 2024/25 EU-27 maize production to 60.3 Mt due to droughts in southeastern Europe. Also today, consultancy firm IKAR, cut its forecast for Russia's wheat crop to 82.2 Mt from 83.8 Mt on adverse weather in Volga, Urals, and Siberia. The USDA WASDE report due out on Thursday will be a key watchpoint regarding global grain supplies.

Global demand 

Global demand for grains has remained firm, as shown by increased international tenders, a surge in Chinese imports, and stronger-than-expected US export sales. These factors have supported higher prices for maize and soybeans. China’s soyabeans import was at record 12.4 Mt in August. The feed sector is also seeing increased demand, with Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) seeking 65 Kt of feed wheat and 25 Kt of feed barley to be loaded by 31 December.

Export dynamics

The robust pace of wheat exports from the Black Sea region has kept prices stable despite production cuts. Russian wheat exporters continue to offer supplies at highly competitive prices, while shipments from Ukraine have also remained strong. According to Ukraine’s agriculture ministry, grain exports for the 2024/25 season have risen to 7.6 Mt as of 9 September, up from 5.1 Mt at the same point last year.

Trade tension

China announced on Monday a one-year anti-dumping investigation into imports of Canadian canola. This follows Canada’s decision to impose tariffs on Chinese electric vehicles and other products. This development has supported soybean prices, as it’s believed that China, the world’s largest buyer of soybeans, might further increase purchases of the alternative oilseed.

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