US prices gain as temperatures forecast to rise: Grain market daily

• There were contrasting fortunes for grain and oilseed prices yesterday. New crop (Nov/Dec-24) Chicago soyabean, maize and wheat futures all gained ground due to concerns about the weather outlooks in the US (see below). Hot weather in parts of China affecting spring crop planting and buying by speculative traders were also potentially factors.
• However, Nov-24 UK feed wheat future fell £1.30/t to £204.45/t, while Dec-24 Paris milling wheat futures fell €1.75/t to €246.00/t. Technical trading may have contributed to the dip in prices.
• Paris rapeseed futures gained yesterday following soyabeans, despite a dip in Winnipeg canola prices due to a generally favourable Canadian weather forecast. The Nov-24 Paris rapeseed futures contract gained €3.25/t to close at €476.75/t (approx. £403/t).

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Chicago maize, soyabean and wheat prices all gained yesterday (13 June) on the back of forecasts for higher warmer temperatures in key US crop growing areas. While recent temperatures in the US maize (and soyabean) belts have been generally below average for the time of year, this is changing. Temperatures are picking up and are forecast to be notably above average for the rest of June, though next week at least also has good rain for most areas.    

Meanwhile, wet weather is predicted for key winter wheat growing areas. As harvest is already well underway in the key southern producing states, the forecast weather is more likely to slow dry-down or harvest progress.

US maize and soyabean crops are off to a strong start. The USDA reported the highest proportions of maize (74%) rated as good or excellent for four years this week, with 72% of soyabeans in the same condition matching 2020.  Planting was into the closing stages in most areas on 9 June (USDA).

The weather in July can have considerable influence on US maize yields, while August is more important for soyabean yields. Hotter and drier weather can reduce yields, while cooler and wetter weather can support yields. As crops build towards these key periods, crop conditions will be under scrutiny for insight into yield potential. Given the current temperature forecasts for the next fortnight, more risk premium is likely to be built into prices.

US crops important to global price outlooks

The USDA currently forecasts the US maize crop at 377.5 Mt, down 3.1% from 2023 as the projected record yield fails to offset a 4.9% smaller planted area. Soyabean production is predicted to rise 6.9% to 121.1 Mt due to gaining area from maize plus record yields.

The sharp rise in US soyabean production is part of why global soyabean supplies continue to look heavy for the season ahead. The global maize market looks finely balanced, so any losses from the US crop could tighten the global grain picture and support prices.

The US National Weather Service will update its long-range weather forecasts for July, and July – September next Thursday.

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