Grain Market Situation July 2017

Grain Market Situation July 2017
30 Jun 2017

Grain Market Situation July 2017


World Markets Overview

A mixed tone prevailed across world grain, oilseed and rice markets during the past month. While average maize and soyabean values weakened on a comfortable nearby supply outlook, wheat and barley prices moved higher on deepening worries about spells of dry, occasionally hot weather.
With crop forecasts being trimmed amid adverse weather, grains production in 2017/18 is expected to decline by 4% y/y.

Consumption is seen remaining high and stocks may contract for the first time in five years. Grains trade in 2017/18 is seen staying close to record levels, underpinned by strong shipments of wheat and maize.

Tied to a contraction in key exporters, global soyabean stocks are seen falling by 8% y/y in 2017/18. Trade is projected to rise to a new high of 148m t.

Rice trade is predicted to climb by 6% in 2017, remaining at a high level in the following year, on demand from buyers in Asia and Africa.

(Source: International Grains Council, Grain Market Report GMR 478 29th June 2017)

Grain Futures

World Production Figures

(Source: International Grains Council)

EU feed wheat prices have dropped €3/t over the week, as a rise to a one-year high for the euro and favourable EU/Black Sea weather outweighs the strength in the US market.

Although the weather is currently favourable, the recent heatwave is seen to have caused some damage to the crop, with Strategie Grains lowering its projection for the French soft wheat crop to 1.6 million tonnes from their mid-June report.

UK new crop prices have fallen £2/t on the week, as the governor of the Bank of England triggered a rise in the value of sterling with a clear-cut suggestion that UK interest rates would need to rise. Old crop values seem to be easing as the potential of larger-than-expected old crop supplies, more optimism over new crop production, and waning consumer demand start to weigh on long-holders.

US spring wheat futures have soared to a three-year high as drought conditions in the northern plains increases the talk of greater crop abandonment and concerns over the availability worldwide of quality and high protein wheat supplies.  Although some signs of support are starting to drift into the Chicago market on spread trading, quality issues in winter wheats and current favourable weather forecasts for US corn and soy crops continue to limit the gains in Chicago.

Although short-term weather forecasts remain favourable, the long-term forecast (which is hard to trust) brings hotter, drier weather back into the US Midwest, which could stress crops during their key development stages.

(Source: DG AGRI)


In the UK, the first winter barley has been cut and the yields have been between 2.5 and 4t/acre. Spring crops in the UK are looking average to good and the UK may be on track for a big surplus.

The French winter crop is approximately 40% complete.  Overall yields and quality are average, however there are some areas achieving yields just below average with high nitrogen, which has made trade participants cautious.  The spring barley harvest in France should start in a couple of weeks and expectations are for an average harvest at best.

In the Southern Hemisphere, plantings are advancing and conditions remain favourable in North and South America, however, rainfall is needed in Australia.


The rapeseed market has remained relatively stable this week with sterling/euro moves offsetting the volatility in the Matif rapeseed futures market.  Harvest in France has started with yields and quality being reported as slightly above average and the first vessels are loading in the French bay destined for the North European crushing mills.


(Source: European Commission – DG JRC)

(Source: European Commission – DG JRC)


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