Key grain market drivers this week: Grain market daily

• UK feed wheat futures (Nov-24) closed at £183.30/t yesterday, down £0.40/t from Tuesday’s session. The May-25 contract ended at £196.05/t, down £0.85/t over the same period.
• Global wheat markets traded relatively sideways yesterday. The easing of tensions in the Black Sea added some pressure, though poor European harvest results continue to limit any pressure. Read more on what’s driving prices below.
• Nov-24 Paris rapeseed futures ended yesterday’s session at €465.75/t, up €2.75/t from Tuesday’s close. The May-25 contract ended at €469.50/t, up €3.25/t over the session.
• European rapeseed markets followed US soyabeans up yesterday. Support for US soyabean prices came from concerns over hot and dry weather in top producer Brazil. However, gains were limited as Brazilian statistics agency Conab, still forecast the country’s 2024/25 crop at 166.3 Mt on Tuesday, up 12.8% on the year (LSEG).

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Across the last seven days, UK feed wheat futures have generally trended down. This is largely on the back of easing tensions in the Black Sea following last week’s missile strike, with competitive exports continuing to flow from the region. However, there are some key drivers that could impact grain markets over the coming days.

Yesterday, FranceAgriMer cut its forecast of French soft wheat exports for the 2024/25 season to 4.0 Mt outside the EU, and 6.0 Mt within the EU. This is down from 7.5 Mt and 6.5 Mt respectively in July’s estimates. The downward revisions are due to the lower-than-expected harvest. Production is now expected down 27% on the year, and one of the worst harvests in the past 40 years.

Adding to the bearish sentiment this week was an upwards revision to the Russian wheat crop. On Tuesday, SovEcon raised its 2024 wheat crop estimate to 82.9 Mt, from the previous figure of 82.5 Mt, citing higher yields. However, concern remains over recent heavy rains in the Siberian region of Krasnoyarsk, with a state of emergency now declared due to the damage on crops. Earlier this month, Tomsk, another Siberian region, also declared a state of emergency, with almost 3 Kha of crops destroyed.

Following concern over drought conditions in the US Corn Belt, plentiful rain is due over the region in the coming week. As of 10 September, 18% of the US maize crop (by area) was affected by drought, up from 13% the previous week. However, with much of the crop now maturing and harvest underway, any impact from these conditions will be minimal.

Chinese demand for US maize has eased as of late. In the first eight months of 2024, China imported 12.6 Mt of US maize, down nearly 16% from the same period a year ago. The Biden administration on Friday confirmed further tariff hikes on Chinese imports, including electric vehicles and steel. This could potentially sour the trading relationship between the two countries, with China reportedly showing little interest in 2024-25 offerings.

To conclude, as it stands, the continuation of competitive supplies from the Black Sea, as well as improved conditions in the US maize belt could weigh on markets. However, European harvest results and the condition of later harvested crops will be something to watch looking ahead.

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