After a positive week for grain markets last week the pressure has returned this.
The latest AHDB Grain Marketing Report shows UK feed wheat futures (Nov-23) closed on Wednesday 25th October, at £184.80/t, down from the £191.30/t peak of last week. Over the longer term, UK wheat futures continued to be pressured, but the downward pressure is slowing. The Nov-24 contract also fell over the same period by £0.80/t, ending at £201.30/t.
Largely dictating the pressure on the domestic futures this week has been the pressure in Paris wheat futures. Reasons for this include a reduced export demand for European origin wheat with a lack of new tenders from major importers. Further, the recent rain in Australia and Argentina has eased wheat production concerns in both these countries, which are predicted to account for 14% of global wheat exports in the 2023/24 marketing year.
Moreover, the limelight is still on competitive Black Sea grain, which is currently supplying the global market. For context, Russia spot feed wheat (FOB – Novorossiysk) was quoted at $196/t (approx. £162/t) yesterday. This is a significant discount to EU Black Sea spot feed wheat (FOB – Constanta, Varna, Burgas), which was quoted at $227.5/t (£188/t) (UkrAgroConsult).
Further to that, Ukraine’s ‘new’ Black Sea corridor has been bolstering world supplies. The Ukrainian Agriculture Minister reports that over 700 Kt of grain has passed since the operation began in August.
Rapeseed fared better. Nov-23 Paris rapeseed futures gained €6.00/t yesterday to close at €411.50/t, while over the same period the Nov-24 contract gained €10.00/t, closing at €447.00/t.
Gains in Paris rapeseed have followed gains in Chicago soybean oil and Malaysian palm oil. Also, conflict in the Middle East increased nearby Brent crude oil futures yesterday by 2%, closing at $90.13/barrel.