Despite the underlying supply and demand outlook, grain markets have recovered slightly as we move into February.
The AHDB Arable Market Report shows UK feed wheat futures (May-26) at £168.45/t. Traders have been unsettled by recent weather events, and prices would possibly be higher but for the strength of sterling.
Some US states have been hit by unseasonably dry and then cold conditions. This could impair wheat crops, though senior AHDB analyst Helen Plant notes the impact won’t be fully known until crops emerge from dormancy.
Further south, rain is needed to support maize crop development in parts of Argentina after below-normal rainfall in January.
The weather could also hit crops in Eastern Europe. A lack of insulating snow cover has left wheat exposed to the elements in parts of western Russia and Ukraine.
Paris rapeseed futures slipped slightly after being underpinned by higher crude oil prices last week. The May-26 contract stands at €472.75/t, while the Nov-26 contract dipped to €458.75/t.
However, with the lifting of Canadian canola tariffs by China and the likelihood that the US will push on with its Renewable Fuel Standard (RFS) program, the picture is broadly positive.
