As 2024 opens the key market driver remains the same according to the latest AHDB Grain Market Report.
The flow of competitive Black Sea wheat remains in focus for this season’s market movements, with abundant Russian wheat continuing to be a bearish factor. UK feed wheat futures (May-24) closed on January 3rd at £193.55/t, £3.00 down on where they closed ahead of the Christmas break. New crop futures (Nov-24) lost £2.00 over the same period, closing at £206.15/t.
Russian Black Sea grain ports are looking full, and Black Sea consultancy Sovecon has recently trimmed back their Russian wheat export forecast for 2023/24. Full ports bring some hope as the EU may pick up shipments. However, Russian wheat is starting 2024 with a price advantage, initial prices for 11.5% (Free On Board) wheat for January shipment at a discount of $10-12/t under western EU.
Oilseeds gained a fraction over the same period. Paris rapeseed futures (May-24) closed at €437.25/t up €2.50/t. The new crop futures contract (Nov-24) closed at €440.75/t, a gain of just over €1.00.
However, the outlook for 2024 is uncertain. Despite the El Niño weather impacts Brazil is still going to produce a large amount of soyabeans. Ag consultancies are lowering crop estimates but at 150 Mt+ these revisions have been priced into the market.
US demand for soyabeans has grown exponentially from large biofuel demand, which has tightened their ending stocks. Planting intentions for new crop is approaching. Based on current Chicago soyabean and maize futures (Nov-24) prices the soya/maize price ratio is 2.29x, Historically this ratio shows that soyabeans could be favoured, large US soyabean areas could weigh on prices this spring.
Prices going into 2024 are not going to drop as much as they did in 2023, based on historical pricing. However, there is going to have to be either a dramatic shift in demand or a major weather event this spring in the US to offer any significant price support to the oilseeds complex.