It’s been another slow week for grain markets. The latest AHDB Grain Market Report sees the UK feed wheat futures (Nov-24) contract at £192.10/t, a rise of less than £1.00/t from last week’s close (August 2nd). The May-25 contract did a little better and currently stands at £203.30/t.
Tenders from Egypt, Jordan and Algeria offered some support, as did lingering concerns over rain-interrupted wheat harvests in France and Germany.
Have Russian wheat prices reached a floor?
Following an abnormally hot spell, an earlier than usual Russian harvest pressured global wheat markets during July. Russian milling wheat (12.5% protein) for export was quoted around $217 – $218/t in late July (FOB Novorossiysk) and into this month, around $25/t less than the same time last year.
But tight margins resulted in reduced farm sales and Turkey’s ban on wheat imports until 15th October is likely to weigh on Russian export prices. For the 2023/24 marketing year (July – June), Turkey was Russia’s second largest export destination for wheat, taking 7.0 Mt.
While Russian wheat prices are pricing notably lower than last year, there is now market speculation that a floor price has recently been found.
In the short term, ample Russian wheat stocks are likely to keep prices under pressure, the country’s stocks were estimated at 20.3 Mt in July, 21% higher in comparison to last year (SovEcon). Competitively priced US maize has also been a key factor weighing on the global wheat market.
AHDB analysts believe the high levels of recent global tenders show some support that Russian wheat pricing has reached a floor and could help alleviate further pressure on physical wheat prices globally.
Rapeseed support following Brent crude rise?
Rapeseed prices followed the wider oilseeds complex, specifically, soybeans futures have continued to trend downwards on low demand and favourable weather conditions in the US.
Paris rapeseed futures (Nov-24) fell over the same period and currently stands at €460.00/t. The May-25 contract also fell to €462.50/t.
However, a 2.4% rise in Brent crude oil futures earlier this week could offer some support going forward.
