Despite the recent downsizing of US wheat production by the USDA, grain prices have fallen further on the back of favourable weather in the USA, lower crude oil prices, higher global wheat inventories forecast and Northern Hemisphere harvest pressure.
AHDB analysts describe the USDA report as having a ‘neutral to bearish sentiment’ which helped push November 26 UK feed wheat futures below £179.00/t.
The pressured sentiment isn’t helped by an expected large South American maize crop and improving crop conditions in France, Germany and Poland, while additional rain in eastern Europe has also supported yield potential.
In addition, President Trump reported that the Strait of Hormuz will be reopened, with a peace deal expected to be signed this Friday. This will only pressure markets further, however AHDB analysts say that given the geopolitical volatility, this could quickly change.
Oilseeds outlook
Lower crude prices and improving weather in many regions have pushed the oilseeds complex lower too, Paris oilseed futures dipped slightly to €520.50/t.
However, the US Climate Prediction Centre is forecasting El Niño conditions, which are expected to strengthen as we move through the year. This weather event could have a significant impact on Southern Hemisphere oilseed production and the AHDB advises that this is a critical watchpoint for growers.
