12 Mar 2019
Grain Market ReportGrain
Demand for feed picked up slightly over the past week as wintry conditions returned and cattle were rehoused. The recent drop in both spot barley and wheat has also bought back some demand from the cheaper competitor grains. Although new crop prices have fallen significantly, they have at least steadied in the past week.
Native/Import Dried Prices
|Spot 11/03/19||April – Jun 2019||New Crop 2019|
|Wheat||€203 – €205/t||+ €1/t per month||€185|
|Barley||€192 – €194/t||+ €1/t per month||€175|
|Soya (Import)||€332||€332 – €335|
Bearish sentiment has continued on all International wheat markets with trader reports showing that funds have again increased their net short positions on wheat. In the past 5 weeks US wheat futures have collapsed by up to 20% while Matif futures have fallen in the region of 10%.
This stems from the ongoing concern that export demand is lagging, despite increasingly competitive prices, with forecasts for early and large harvests in Europe and Russia still on the cards. The USDA released its March report on Friday which confirmed analyst projections regarding increased world wheat ending stocks and a reduction in the export forecast for the cereal. It was hoped that the reduction in supply from the Black sea would result in increased demand from other locations however this has not materialised due to surplus stocks of feed grains.
The imports of maize into the EU show no signs of abating with European commission data showing EU 2018/19 maize imports now at 17.2 million tonnes, up 42 percent from 12.1 million tonnes a year earlier. On the other hand, soft wheat exports in the 2018/19 season that started in July had reached 12.5 million tonnes by March 10, down 11 percent from 14.0 million tonnes a year earlier, while barley exports were at 3.2 million tonnes, down 23 percent from 4.1 million tonnes a year earlier.
Corn futures fell further on Friday after the USDA raised its forecast of U.S. end-of-season corn stocks to above the top end of trade expectations, reflecting reduced projections for export and ethanol demand.
In its monthly supply/demand report on Friday, the U.S. Department of Agriculture (USDA) also trimmed its outlook for U.S. end-of-season soybean stocks, but these remained at a record level. Signs of progress in the US/Chinese talks had lifted markets however there has been no recent positive news on the talks and with high stock levels and a good harvest projected from South America this has kept prices at monthly lows.