What’s driving grain prices this week? Grain market daily

• UK feed wheat futures (May-24) closed at £201.05/t yesterday, down £1.65/t from Wednesday’s close. The Nov-24 contract was down £0.95/t over the same period, ending the session at £208.05/t.
• Domestic wheat futures followed global grain markets down yesterday. Following the release of the latest USDA World Agricultural Supply and Demand Estimates (WASDE) yesterday evening (after UK markets had closed), US grain markets saw further pressure on prices. The US maize crop was revised up to just under 387 Mt, up 11% on the year. Read more on this below.
• Paris rapeseed futures (May-24) fell €7.00/t over yesterday’s session, closing at €441.50/t. The Nov-24 contract closed at €447.00/t, down €6.00/t over the same period.
• In Argentina this week, welcome rains led to the Buenos Aires Grain Exchange reporting that farmers in the country could plant more fields with soyabeans than initially estimated. This pressured the wider oilseeds complex.

Domestic feed wheat futures have remained variable this week, following price movements in global grain markets. Domestic new crop feed wheat futures have moved slightly differently to old crop in recent weeks, with concerns over wet weather hampering plantings in the UK.

On a global scale, the key drivers of grain markets at the moment are yesterday’s USDA World Agricultural Supply and Demand Estimates (WASDE), South American weather, and Black Sea exports.

USDA World Agricultural Supply and Demand Estimates

Yesterday the USDA released its most recent WASDE, and the market has seen slight reactions as a result. Ahead of the release, analysts were expecting, on average, that we would see a small upward revision to the US maize crop off the back of marginally higher yields, as well increased US end of season stocks.

The average of analyst estimates based on a Refinitiv pre-report poll suggested that maize production would be pegged at 383 Mt. In yesterday’s report, the production figure exceeded expectations and was revised up to 387 Mt. Analysts on average expected US maize ending stocks to sit unchanged from the October WASDE at 54.1 Mt, but in yesterday’s report stocks were revised up to 54.8 Mt.

As a result of this, Chicago maize futures (May-24) slid 2% yesterday, closing the session at $193.50/t, and pressuring the wider grains markets.

South American weather

While yesterday’s WASDE put a bearish sentiment onto the market, South American weather is continuing to limit any further pressure on global grain prices. Despite some welcome rain in Argentina, Brazil continues to experience hot and dry weather across the Mato Grosso region, building concern over the plantings of the second maize crop, due to start planting early in 2024. Over the next seven days, hot weather with minimal to no rain is due in the region, which could lead to some support; something to watch out for next week.  

Black Sea exports

Another factor that is being monitored in grain markets at the moment are Black Sea supplies. The First Deputy Agriculture Minister in Russia reported yesterday that the Russian grain harvest this season (2023/24) has reached 147 Mt, up from earlier forecasts of 140 Mt, but down from last year’s 158 Mt.

Ukrainian grain also continues to flow out of the alternative ‘humanitarian corridor’, despite a Russian attack on a civilian vessel earlier in the week. However, brokers said today that freight costs for ships using the corridor had risen as a result, something to watch moving forward.

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