US planting dilemma – maize or soyabeans? Grain Market Daily

• UK feed wheat futures (May-25) ended yesterday at £182.00/t, up £1.00/t from Monday’s close. The Nov-25 contract was up £0.75/t over the same period, to close at £194.75/t.
• Domestic wheat futures rose following Paris milling wheat and maize futures, while Chicago wheat and maize futures fell. Weather risks for winter crops in the US have eased, putting pressure on Chicago futures. The weather forecast in Argentina and tariff worries stimulated speculators with buying trading position to sell on Chicago maize futures.
• May-25 Paris rapeseed futures closed at €530.25/t yesterday, up €6.75/t from Monday’s close. According to the European Commission, imports of rapeseed into the EU from 1 July to 23 February totalled 4.23 Mt, compared with 3.87 Mt for the same period last season.
• Chicago soyabean futures (May-25) were slightly up 0.12% on the day at yesterday’s close. However, May-25 Chicago soyabean oil futures fell for the third consecutive trading session.

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The spring planting campaign in the northern hemisphere is attracting increasing attention from market participants.  Typically, farmers plan the main crops in advance, but there is still some scope for change up to the start of the planting campaign. Of course, the weather can bring so many unpredictable changes to the fields.

Cereal and oilseed prices have a major influence on farmers' final cropping decisions. Globally, in recent years the oilseed area has increased, partly because of price competitiveness with cereals. For example, the average annual growth for the harvested area of soyabeans globally for the last five years is 3% compared with 1% for maize.

For the US, the USDA's 101st Annual Agriculture Outlook Forum (AOF) will be held on 27–28 February 2025. Traditionally, this forum is used to present the first forecast figures for the US spring crop.

The Chicago futures price parity for soyabeans (Nov-25) to maize (Dec-25) was 2.09 on 25 February, compared with 2.31 at this point last year. This means that maize is 10% more competitive for planting than at the same time last year. The current parity is the lowest for four years. This price relationship could incentivise US farmers to plant more maize over soyabeans for next season.  If the maize area in the US does rise, it is a serious argument for pressure on feed grain prices for the 2025 crop.

Why is this important for the UK?

New crop domestic feed wheat futures (Nov-25) reached a three month high of £200/t on 18 February. However, prices have since fallen, partly on projections of higher global maize plantings in 2025, including in the US.

The current premium of more than £12/t for new crop (Nov-25) UK feed wheat futures over old crop (May-25) could come under pressure in the coming days as the first USDA estimates for US cereal and oilseed plantings for 2025 are released on 27-28 February.

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