The Agriculture and Horticulture Development Board (AHDB) is reporting that both wheat and maize grain markets strengthened during the early part of last week.
The trend was driven by concerns over hot, dry weather in the US midwest, where much of the world’s maize crop is grown.
At that stage, the condition of the crop pointed to lower yields than the United States Department of Agriculture (USDA) had previously forecast.
But the prospect of rain later in the week for these maize-growing areas led to profit-taking and maize prices falling.
As a result, December 2023 Chicago maize futures ended the week lower.
Global wheat markets
However, global wheat prices ended the week up and have moved up again in early trading yesterday (Monday, June 26).
The Russian political situation jumped into the headlines over the weekend due to the rebellion by the Wagner group of mercenaries.
It also seems more likely that the Black Sea Initiative (Ukrainian export corridor) will not be extended, based on statements by both Ukraine and Russia.
In addition, Romania may give priority access to domestic grain in the port of Constanta. It is estimated that the port has handled around one third of Ukrainian grain exported since the invasion of Ukraine.
This means renewed uncertainty about global access to Black Sea grain at a time when there are suggestions that global wheat supplies are looking tighter.
Crop report
The EU Monitoring Agricultural ResourceS (MARS) crop report trimmed EU-27 wheat, maize and barley yield prospects last week, with the largest cuts for spring barley.
SovEcon trimmed its forecast for the 2023 Russian wheat crop by 1.2Mt to 86.6Mt, It is also expected that the 2023 Indian wheat crop will be 10% smaller than initially forecast.
Meanwhile, the main story driving oilseed markets over the past few days has been the weather prospects for the United States.
Chicago soyabean futures (Nov-23) ended down 2% last Friday. However, just two days earlier, the contract climbed to the highest close since the start of March.
The USDA crop progress report released to the week ending June 18 cut the US soyabeans ‘good-to-excellent’ rating to 54%, down from 59% the week before.
This was a greater cut than expected, with notable downward revisions in Iowa and Illinois.
Despite this support at the start of the week, the market actually ended the week down. The market dropped with investors locking in profits, and a weakness in crude oil markets from a negative economic sentiment as markets focused on rising interest rates.
However, by the end of last week, the weather in the US midwest looked to improve, taking some fuel out of the bullish sentiment.