What’s driving prices this week? Grain market daily

• UK feed wheat futures (Nov-22) closed yesterday at £266.05/t, up £1.90/t from the previous close. Yesterday saw a high volume traded on this contract.
• The Nov-23 futures gained £1.65/t yesterday, to close at £240.65/t. Whereas, Nov-24 futures closed at £218.65/t, down £16.75/t from the previous day.
• Paris rapeseed futures (Nov-22) closed yesterday at €660.25/t, up €4.50/t. Gaining support from rising Chicago soyabeans (Nov-22) and Malaysian palm oil (Nov 22) prices.
• Brent crude oil (nearby) continues to feel pressure from global recessionary fears. Yesterday, the contract closed at $96.31/barrel, down $0.34/barrel.

UK feed wheat futures continue to move sideways this week. Despite pressure from moving grain from Ukrainian ports, hot and dry weather in the EU and US continues to support maize and soyabean prices. As such, providing a strong floor to markets.

Main global drivers this week?

1. Hot and dry weather in the US

Parts of the US Midwest continue to remain hot and dry. On Monday evening, the latest USDA crop progress report trimmed conditions in data to 7 August. US maize conditions were down 3 percentage points (pp) on the week, to be rated 58% ‘good to excellent’. Soyabeans were down 1pp to 59%, and spring wheat down 6pp to 64%. Spring wheat harvest has started and was 9% complete as at 7 August, 10% behind the five year average progress for this point in the season.

Some areas of the Midwest have received rainfall recently and more showers could fall in the week ahead. Though as a percentage of normal, this area looks to remain dry.

2. Hot EU weather – what can we expect from grain supply?

EU weather remains hot and dry too. France is receiving its fourth heatwave of the summer this week. The EU maize outlook has been trimmed down due to hot and dry conditions across the bloc. French maize output is currently forecast to be down 18.5% from harvest 21.

For wheat, French soft wheat harvest is reportedly complete. The crop is showing mixed protein results in northern France according to FranceAgriMer. Though in key production regions in the north, proteins are averaging around 11%. Southern areas are recording high proteins.

3. Ukrainian grain moving

Yesterday, two ships left Ukrainian port Chornomorsk. One carrying 64.7Kt of maize to South Korea, and another taking 5.3Kt to sunflower meal to Istanbul. This brings the total to 12 ships leaving Ukrainian ports since the deal was signed between Ukraine, Russia, Turkey, and the United Nations.

4. Awaiting Friday’s WASDE

With the latest USDA World Agricultural Supply and Demand Estimates (WASDE) due on Friday, markets await direction on the world supply and demand picture for grains and oilseeds.

With Russian harvest slower than expected, Russian wheat production and export forecasts will be something to note on Friday. Exports are now leaving Ukraine too. Will we see revised grain and oilseed export forecasts? And will global availability look less tight? If we think back to before the war broke in Ukraine, the supply and demand balance had been tighter than previous seasons for some time.

Finally considering the hot weather in the US and EU, soyabean and maize forecasts for harvest 22 will be key to global supply.

A look at our domestic picture

Looking closer to home, harvest is progressing speedily. In data up to 02 August, GB harvest for winter barley is 99% complete, winter wheat 30% complete and GB winter rapeseed harvest 84% complete. Some growers are making a start to spring crops, though many are hoping to get winter wheat completed before doing so. The next harvest report update is provisionally set for release on Friday (12 August).

Reports point to strong specific weights for wheat, though proteins appear lower. Yields too for winter crops have been variable depending on light sandy soils vs heavier soils (moisture retaining during dry conditions). In barley and wheat, some anecdotal reports of ergot coming through have been noted.

Conditions remain dry across the UK. According to the Met Office, July in England was the driest since 1935. In southern England, this July has been the driest on record. Water restrictions in your area remain something to watch out for.

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