Grain price: Weather impacting markets
Grain markets took a dip in the middle of the week, but began to recover on Thursday. While, as always, a number of factors affected movement in the markets, weather is playing a role.
Looking at data from INTL FCStone this week it showed that just 56% of the French winter wheat crop was in good or excellent condition.
At the same time last year 80% of the French crop was in good or excellent condition, while in 2018, a year of severe drought across Europe 79% of that crop was reported to be in good to excellent condition. However, in 2018 drought conditions set in later in the season.
The rise in price on Thursday is also thought to be in some way due to a forecast for high temperatures in parts of the US and Russia next week.
The Agricultural Market Information System (AMIS) Crop Outlook has placed a “watch” condition on crops in the majority of the EU, as well as the UK, Ukraine, some of Argentina and some of the United States.
Wheat production forecast down, but demand also lowered
The UN has forecast a cut in global wheat production in 2020. It is forecasting that wheat production will decrease by 4.3 million tonnes in the 2020 season. This is expected to bring total wheat production to 758.3 million tonnes. However, demand for wheat has also decreased.
Feed barley on the continent (delivered Rouen) was trading at a spot price of €164/t on Friday afternoon, while Free-On-Board (FOB) Creil malting barley was at a spot price of €180/t.
The 2020 FOB Creil Planet malting barley price finished at €178/t on Wednesday afternoon. This price will contribute to the average harvest price for Boortmalt suppliers.