Grain markets took a considerable tumble over the past seven to 10 days. December wheat futures closed last Monday at €343.25/t, having been at €385.50/t a few weeks ago and down from a high of €438/t around mid-May. That’s back almost €100/t from the peak in the market.

Physical price drops have been less dramatic, but they were never as high as futures.

Glanbia price offers peaked at €360 and €345/t for green wheat and barley for harvest, but these were back to €300/t and €285/t earlier this week.

Background impacts

The general weakening in prices was a response to a lot of things, not least of which was a lack of news to drive them up.

News of lower-than-expected US maize export sales started the slide. Also, efforts continue to establish a corridor for Ukrainian grain exports ahead of the harvest there.

Allied to these, harvesting is now under way in many countries in the northern hemisphere, so harvest pressure is real.

Concerns over global demand across all food products due to the income squeeze is also weighing on market sentiment, as are suggestions that we may see a temporary waiver on biofuel mandates.

Maize

Chicago maize also fell substantially over the past week but, like wheat, it picked up slightly again this week.

News that export sales were lower than anticipated prompted the market response and this was enhanced by a forecast of rain in drought-prone areas of the US Midwest.

The market now awaits numbers for the actual area of maize planted in the US. Predictions indicated that maize area would be reduced somewhat in response to the high nitrogen prices in favour of soya beans.

If this area prediction is reversed by the recent high price levels, then that market could weaken further. But the converse is also true.

Native prices

High volatility and the lack of market activity continues to make prices difficult for buyers and sellers.

The big users have taken a level of forward cover, but this was minimal in the very high price era. There is also real concern here as to the overall level of demand, given the overall economic situation.

However, prices appear to have fallen in line with market sentiment. Nearby wheat is now based heavily on imports and is closer to €380/t, with barley around €370/t.

New-crop grains are also lower, with wheat said to be in the €350 to €360/t range in recent days. Barley would now appear to be €10 to €15/t below wheat.