Grain prices: supply continues to influence physical prices
While futures markets continue to be depressed by marketing issues and currency, physical prices are more influenced by weather and the 2020 production season.
Grain markets are currently differentiating in futures and physical markets.
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International futures markets continue to dance about with a slight decrease over the last week, a rise again early this week and a further easing again towards midweek.
While lower overall global grain production now seems likely, US futures and sentiment continues to be influenced by stiff competition for wheat exports from EU and Black Sea sources, with currency being a factor.
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Difficulties with crop planting in many parts of the world are now being factored into market thinking. We already see the first of the independent EU estimates decreasing wheat production in 2020.
This is a consequence of the wet autumn across much of northwestern Europe and its impact on winter cereal planting here, in the UK and parts of France, Belgium, etc. There is also concern that a proportion of the unplanted wheat acre in Britain may go to fallow rather than cropping.
Interestingly, the forward sentiment on barley is now quite negative in expectation of big spring barley plantings.
Physical appears to be supported by slow farmer selling and poor new-crop prospects. Native prices remain steady, but there are some instances of stronger prices. Nearby wheat and barley are put at €185 and €175/t respectively. May ’20 prices indicate €190/t for wheat and €177/t for barley, the latter reflecting concern over large barley production in 2020. November ’20 price indications suggest €186/t for wheat and €174/t for barley.
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Title: Grain prices: supply continues to influence physical prices
While futures markets continue to be depressed by marketing issues and currency, physical prices are more influenced by weather and the 2020 production season.
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International futures markets continue to dance about with a slight decrease over the last week, a rise again early this week and a further easing again towards midweek.
While lower overall global grain production now seems likely, US futures and sentiment continues to be influenced by stiff competition for wheat exports from EU and Black Sea sources, with currency being a factor.
Difficulties with crop planting in many parts of the world are now being factored into market thinking. We already see the first of the independent EU estimates decreasing wheat production in 2020.
This is a consequence of the wet autumn across much of northwestern Europe and its impact on winter cereal planting here, in the UK and parts of France, Belgium, etc. There is also concern that a proportion of the unplanted wheat acre in Britain may go to fallow rather than cropping.
Interestingly, the forward sentiment on barley is now quite negative in expectation of big spring barley plantings.
Physical appears to be supported by slow farmer selling and poor new-crop prospects. Native prices remain steady, but there are some instances of stronger prices. Nearby wheat and barley are put at €185 and €175/t respectively. May ’20 prices indicate €190/t for wheat and €177/t for barley, the latter reflecting concern over large barley production in 2020. November ’20 price indications suggest €186/t for wheat and €174/t for barley.
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