Despite concerns over European crop conditions, sterling strengthening against the euro has helped pressure grain markets, cancelling the gains of the previous week. November 26 UK feed wheat futures currently sit at £176.75/t.
The AHDB suggests that global grain markets were influenced mainly by weather, harvest progress, currency movements, and crude oil last week. The hot, dry weather in Europe continued to affect crop condition ratings. In France, maize conditions, as of 22 June, fell to an eight-year low, with 76% rated good or excellent, down from 84% the previous week.
Soft wheat ratings also declined, with 74% rated good or excellent, down 2% week-on-week. The French Ministry of Agriculture and Food now expects maize production to fall by as much as 30%, reflecting both reduced planted area and the impact of the heatwave.
The European Commission also cut its forecast for EU-27 common wheat usable production by 0.6 Mt, to 126.3 Mt.
The US market has mostly ignored the European heat so far, but there could be some support this week because large parts of the US Midwest are running 4 to 8°C above normal seasonal temperatures. The market will be very sensitive to any further signs of crop stress.
Traders’ attention will now turn to the next USDA acreage report and quarterly grain stocks report. Analysts expect the US maize area to be slightly lower and the total US wheat area to be slightly higher than the USDA’s March Prospective Plantings report.
The AHDB believes a departure from trade expectations could move global grain and oilseed markets sharply. As could renewed tensions in the Middle East. Over the last few days, tensions escalated around the Strait of Hormuz, although there are signs of a pause in attacks and the possibility of renewed talks.
Oilseeds outlook
Lower crude prices have limited gains for the oilseeds complex. November Paris oilseed futures have risen to €522.00t, helped by concerns over crop conditions across Europe and the US.
The EU Commission has decreased the EU-27’s rapeseed production forecast for the 2026/27 season from 20.85 Mt to 19.80 Mt.
Strong global demand, notably from Europe and China, supported the global rapeseed market. Further to that, rumours of Chinese interest in Australian canola also provided market support (Bloomberg).
