Grain markets have undergone significant price adjustment over the past week or two, with futures prices having dropped almost €100/t from peak.

Physical prices did not rise as high as futures at the time and they have not fallen to the same degree as a consequence.

However, harvest green price offers have dropped by about €60/t in recent weeks.

This is seen in recent price offers from the co-ops which have now dropped to €300/t or lower for green wheat at harvest and around €285/t for feed barley. These price offers were as high as €360/t and €345/t for green wheat and barley, respectively, in mid-May.

Many different factors are influencing the downward price movement, including harvest pressure, talks on grain exports from Ukraine, weather and potential demand changes arising from the higher prices and from tightening consumer disposable incomes.

For weeks now, physical prices here have been divorced from futures prices to enable wheat and barley to compete on feed ingredient markets post-harvest.

Price competition

Imported maize provides the main price competition for native cereals and offers for new crop imports have fallen from €385/t ex port in mid-May to around €345/t currently.

While the current price movement is downwards, market fundamentals have not changed much in recent weeks and sentiment is mainly driven by the uncertainty on the demand side.

However, supply is still thought to be tight globally for the year ahead and the market could yet see further upward price movement, which will be heavily influenced by weather issues.