There’s very little difference between the latest weather forecast and AHDB Grain Market Report, both make rather miserable reading.
Grain prices have slipped further. As of February 8th, UK feed wheat futures (May-24) stood at £171.25/t and the Nov-24 contract at £190.00/t. There was no joy with oilseeds either. Paris rapeseed futures (May-24) closed at €410.75/t, down significantly on the week.
Again, much of it is down to what is happening further east. Large Russian supplies, combined with favourable prospects for Russian 2024 crops, continue to weigh on the broader outlooks of grain markets.
There is the possibility of a silver cloud on the horizon.
There is some uncertainty with El Niño weather patterns, currently in effect. Abnormally warm sea surface temperatures in the South Pacific are starting to reduce. This could lessen the weather risk to 2023/24 Brazilian maize yields.
However, looking further ahead the latest models are now predicting that after this brief period of neutral conditions, there could be a transition to La Niña around July to September 2024.
When this last happened, it had a dramatic impact across much of the region and a big influence on the weather elsewhere. It severely cut Brazil’s second maize crop in 2020/21 and decimated Argentina’s soyabean and maize crops in 2022/23.
If the climate models are right, it will mean South East Asia, India and Australia are likely to be wetter, while the Americas will be drier. All of this has the potential to drive global grain and oilseed markets, which will inherently filter into what prices are achieved at the farm gate.
It is far too early to tell what exactly will happen but as the year progresses it is worth tracking El Niño weather updates.