Grain gains short-lived as prices hit new low

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Following the upturn in grain price fortunes at the end of last week (March 1st), the recovery was short-lived and those that predicted the low point was still to be reached have been proved right.

The latest AHDB Grain market report shows that UK feed wheat futures (May-24) closed on Spring Budget day at £159.70/t, down over £5.00 from the previous week. New crop futures (Nov-24) fell by a similar amount closing at £177.95/t – new seasonal lows for both.

Low prices in Algeria’s import tender this week highlighted the fact there is still stiff competition from the Black Sea region. Algeria’s state grain agency, OAIC, is reported to have purchased 870 Kt to 900 Kt of milling wheat in an international tender. Prices reported during the week were between $227.75/t and $228.00/t on a cost, insurance and freight (CIF) basis. The wheat is from optional origins, i.e. sellers’ choice, but the low price means considerable volumes will be from the Black Sea.

Oilseed prices continue to be pressured but further evidence that this is slowing can be seen in slight gains over the last seven days. Paris rapeseed futures (May-24) closed at €422.50/t on March 6th. New crop futures (Nov-24) were marginally up over the same period, ending the session at €422.50/t.

Since January, Chicago soyabean futures have been pressured, largely on the back of large South American supplies and sluggish US demand.

It is probably going to require a significant weather event in the Canadian Prairies or in the US Midwest to see a significant improvement in rapeseed prices.

But uncertainties exist and traders await fresh market-moving news, such as the next USDA World Agricultural Supply and Demand Estimates, which are scheduled to be released on March 8th. Ahead of the report, analysts expect the USDA to lower its Brazilian soyabean production for 2023/24 to 152.3 Mt, from 156.0 Mt last month.

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