Grain price: Brazilian maize crop to return to record levels
After a pessimistic start to the week, prices climbed towards the weekend. Fears of drought in Europe contributed in some way to this improvement, while the euro hitting a 10-month low against the dollar also weighed in on price.
However, with acreage up across Europe and grain in plentiful supply, prices are not expected to jump anytime soon.
Record maize crop expected in Brazil
A close to record maize crop is expected in Brazil and is something to watch out for. That crop will be available in August and once again competitive maize prices look set to take demand from wheat and barley.
According to the United States Department of Agriculture’s (USDA’s) Global Agricultural Information Network, Brazilian corn production for the 2019-2020 season is estimated at 97.5 million tonnes.
Corn area has been forecast to increase by 17.5 million hectares in 2018-2019 (5%) on the year previous and is forecast to further increase for the 2019-2020 season by 18 million hectares.
German drought monitor
There is already severe drought in Germany. The German Drought Monitor is updated daily and at present it shows exceptional drought in much of the country.
Low groundwater levels in UK
Meanwhile, farmers in the UK are already preparing for a possible drought this summer. Groundwater levels are currently below normal and are particularly low in east Anglia.
Further north, the Environment Agency has already stopped farmers from abstracting water from three sources in Yorkshire following low rainfall levels in April.
Last Friday afternoon, April 26, sparked optimism in LIFFE wheat as the May price hit £167.70/t. However, by the end of the day it returned to £166.00/t. It closed at £161.00/t on Tuesday, April 23, and reached £164.75/t on Thursday.
November wheat remains low at £147.25/t – Friday, April 26.
On Friday afternoon, April 26, MATIF wheat for May had made its way back to €183.25/t, close to where it finished last week – €183.50/t. During the week it dropped to €181.50/t. It showed signs of improvement on Thursday when it reached €182.00/t.
MATIF wheat for December was at €177.00/t on Friday afternoon, April 26.
Chicago Board of Trade (CBOT) wheat is unenthusiastic. Having opened the week at 435.75c/bu, it reached 438.75c/bu on Tuesday, April 24, but dropped on Wednesday to 432.25c/bu, before landing at 434.75c/bu on Thursday evening, April 25.
FOB Creil (two-row malting barley)
Having reached a high of €195.00/t last Thursday, April 18, Free On Board (FOB) Creil – for July 2019 – dropped €5.00/t in the week. It landed at €193.00/t on Wednesday, before hitting €190.00/t on Thursday, April 25.