Weather risks support grain and oilseeds markets: Grain market daily

• UK feed wheat futures (May-25) closed at £186.00/t yesterday, down £0.20/t from Wednesday’s close. The Nov-25 contract fell £0.25/t over the same period, ending the session at £197.25/t.
• Domestic wheat prices followed US grain prices lower yesterday as concerns over the risk of very cold weather damaging crops eased. Also, a larger wheat production forecast by the International Grains Council (IGC) contributed to the downward pressure on prices.
• May-25 Paris rapeseed futures closed yesterday at €533.00/t, up €3.75/t over the session. New crop futures (Nov-25) gained €3.25/t over the same period, to close at €504.25/t.
• European rapeseed prices were supported by strength in the wider oilseeds complex. Chicago soybean futures (May-25) rose 1.41% after relief from US President Trump's comments suggesting that a trade deal with China, the top importer of soybeans, was possible (LSEG).

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Grain and oilseed prices have been mixed this week, with the market supported by weather risks in both the Northern and Southern Hemispheres. However, uncertainty about Trump's tariffs is limiting any significant price increases. Wheat futures faced pressure yesterday, while maize and the oilseeds complex saw gains.

Southern Hemisphere

The risk of crop damage in Argentina has increased due to dry weather. While recent rainfall provided some relief from the ongoing drought, forecasts now predict further high temperatures in the coming weeks. This could negatively affect the maize and soybean crops, which are at crucial stages in their development.

In Brazil, recent heavy rains have slowed the soybean harvest. This potentially delays the start of planting of the second (Safrinha) maize crop, which depends on the soyabeans harvest's completion and increases the risk to the maize crop. The forecast for dry weather next week may speed up the soybean harvest.

IGC February report

Yesterday, the International Grains Council (IGC) lowered its 2024/25 global maize and soybean production forecast, mainly due to a weaker outlook for crops in Brazil and Argentina. Global maize production is now expected to be 3.0 Mt lower, at 1,216 Mt (slightly above the USDA's current projection of 1,212 Mt). Global soybean production is forecast at 418 Mt, down 2.0 Mt from the previous month. 2024/25 wheat output is forecast up 1.0 Mt on the month.

Northern Hemisphere

Recent hard frosts in the US and Russia have raised concerns about potential damage to winter wheat crops. Last month, the Commodity Weather Group reported that about 15% of the winter wheat crop in parts of the US Plains and Midwest might have been affected by frigid temperatures due to insufficient snow cover. In Russia, IKAR lowered its 2025/26 wheat production forecast to 82.0 Mt from 84.0 Mt previously due to due to lack of precipitation and severe frosts. Further abnormally cold weather is forecast for Russia the coming week, while warmer weather is predicted for the US.

Soft wheat crop conditions in France have improved over the week. FranceAgriMer reported this morning that 74% of the soft wheat was in good or excellent condition as of February 17, up from 73% the previous week. This is also slightly above the four-year low of 69% recorded at the same time last year but still below 2021 – 2023 levels. Meanwhile, winter barley was rated 69% in good or excellent condition, up from 68% a week earlier but down from 71% in the same week of 2024.

Conclusion

Domestic prices are driven by global trends. Adverse weather in key producing regions, particularly Argentina and Russia, will continue to underpin the global markets, raising supply risks and possibly reducing output further. However, trade policy uncertainties and currency fluctuations are key factors to watch.

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