No golden egg as grain markets remain flat

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With strong Russian exports continuing, grain traders didn’t expect a golden egg this Easter and that has been the case with little change in grain and oilseed markets.

As the first week of April trading draws to a close the latest AHDB Grain Market Report shows UK wheat futures (May-24) standing at £170.55/t, a slight fall on the March closing price. New crop futures (Nov-24) followed the curve at £193.10/t.

However, a critical ‘watchpoint’ is ahead, Black Sea crop conditions.

From the turn of the year, the pace of Russian grain exports has been unrelenting. Wheat, barley and maize exports for March climbed to 6.0 Mt for March, up from February’s figure of 4.9 Mt. Wheat accounts for the greatest proportion of this with 39.1 Mt of wheat already exported from Russia this season.

The humanitarian corridor has seen a large supply of Ukrainian grain too. Ukraine exported 339 Kt of barley in March – this is the largest volume this season.

Although Black Sea grain has pressured grain prices throughout this marketing year, the region’s production for 2024 harvest is going to set the market sentiment for the 2024/25 marketing year.

Initial estimates show that Ukraine’s combined grain and oilseeds harvest is likely to decline to 76.1 Mt, compared to 82.6 Mt seen last year (UGA). The Ukrainian Agricultural Ministry reported that spring sowing has begun within their key regions, planting almost 500kha so far. Ukraine’s maize area is expected to reduce at the expense of soyabeans, due to the profitability they offered in 2023.

For Russia, a large wheat crop is expected, estimates from Sov econ suggest a wheat crop at 94 Mt for 2024. IKAR, an agricultural consultancy, estimates the wheat crop will be slightly lower at 93 Mt.

But as elsewhere the weather could have a bearing. Key Russian winter wheat regions have seen little in the way of rainfall through March and temperatures across the Central, Volga, Southern and North Caucasus regions are going to remain abnormally warm too.

This Russian crop size is a critical price driver of global grain prices, which will inherently feed into domestic wheat prices. There are current expectations of a large Russian crop; however, if this is cut it could lead to some price support.

It was a similar picture with oilseeds. Paris rapeseed futures (May-24) stand at €448.25/t, a slight fall from the close of last month. The Nov-24 contract gained a fraction over the same period currently standing at €458.50/t.

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