It has been another quiet week for grain markets with little change in grain prices from the close on July 5th. However, oilseeds slumped sharply.
The latest AHDB Grain Market Report has UK feed wheat futures at £196.25/t, down just over £1.00/t, new crop futures (May-25) have fallen less and stand at £204.80/t,
Keeping prices where they are is anticipated strong US 2024/25 end of season stocks, the progressing US harvest, and improving crop prospects in Russia.
In addition, AHDB analysts expect India might sell wheat from its reserves, prompting discussion on whether the country will be a net importer this year.
La Niña weather event could return during summer 2024
Most major weather organisations predict a high chance of La Niña forming this year, though the timing and severity of the weather event vary. American weather forecaster NOAA predicted a 65% likelihood of La Niña weather event developing during July to September and an 85% chance during November to January.
A La Niña event happens when the South Pacific temperature drops more than 0.5°C below normal. The cooler the temperature, the more severe the event.
The La Niña weather situation often leads to major changes in global weather patterns, affecting grain and oilseed production and so prices. This phenomenon can result in cooler, wetter conditions in some areas, while causing drier, warmer conditions in others.
It could lead to extreme heat and drought in South America but in Australia La Niña often results in higher rainfall and possibly flooding. If it impacts production the AHDB expects some support for domestic ex-farm prices.
Oilseeds fall back sharply
After last week’s highs, both the Paris rapeseed futures (Nov-24) and the May-25 contract fell sharply, both now back down below €490/t.
Expectations of a rise in Malaysian palm oil supply stockpiles, improving US soyabean crops and better weather conditions in the Canadian Prairies weighing on European markets.
