Strong year-end performance for grain and oilseed markets: Grain market daily

• UK feed wheat futures (May-25) closed at £193.80/t yesterday, rising £1.25/t from Tuesday’s close. New crop futures (Nov-25) gained £1.65/t over the same period, to close at £195.20/t.
• Global wheat markets showed mixed results yesterday. Chicago wheat futures fell because the US dollar strengthened, but the decline was limited by firm maize prices. Meanwhile, Paris milling wheat futures rose due to a weaker euro and concerns about reduced Russian supply amid concerns over winter crop development.
• Paris rapeseed futures (May-25) closed at €520.75/t yesterday, gaining €12.25/t from Tuesday’s close. Paris rapeseed followed Chicago soyabean prices up yesterday due to growing concerns about the weather situation in South America. More details below.

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Over the Christmas period, key grain and oilseed markets were supported. The firmness in the market was driven by short covering, as traders buy back previously established short positions ahead of the year-end, along with uncertainties about the impact of adverse weather on crops in key producing countries.

From 20 December to 31 December, Chicago wheat and maize futures (May-25) rose by 3.6% and 3.1%, closing at $206.68/t and $183.36/t, respectively. Paris milling wheat and Chicago soyabean futures (May-25) also increased by 3.8% and 3.5%, ending the year at €239.75/t and $375.61/t, respectively.

This momentum continued into the new year, as Chicago maize and soyabean futures, as well as Paris milling wheat futures saw gains yesterday (first trading day of 2025). However, Chicago wheat futures faced pressure due to the strengthening of the US dollar as mentioned above. 

The ongoing hot and dry weather in Argentina is contributing to the firmness in global grain and oilseed prices at the moment. Weather forecasts suggest these conditions may persist until mid-January, posing risks to the country's maize and soybean crops, particularly as maize is now in its critical development stage.

Meanwhile in Russia, the state weather agency reported that warmer-than-usual weather is threatening the development of the winter wheat crop in the central and Volga regions (key-producing areas) (LSEG). The wheat crop in Russia needs to experience a period of dormancy to protect itself from cold temperatures, though current milder weather means the crop is continuing to develop. With a low likelihood of much colder spells, the crop is at risk from excess moisture, with conditions expected to worsen throughout the month.

In the US, a stronger export pace towards the year-end added support to prices. However, forecasts of very cold temperatures for northern parts of the country in the coming weeks could impact the development of winter wheat crop.  

Looking ahead

While adverse weather conditions are providing short-term support for prices, currency fluctuations and uncertainties over global demand will continue to limit prices rises. Another major area of concern is the upcoming inauguration of US president-elect Donald Trump, which is a key watchpoint, particularly in the oilseed complex and maize markets.  

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