Last week saw strong trading in grain markets, with December MATIF wheat closing at €338.50/t last Friday, up €23.50/t on the previous week but similar to the previous Tuesday evening. It closed on Monday last at €330/t.

After gaining a few euro on Tuesday morning, it slipped back considerably to a low of €310.25/t on the back of optimism for peace talks in the Ukrainian conflict. Prices picked up slightly before evening to close at €316.50/t.

Oilseeds markets saw even bigger adjustments on Tuesday, with the nearby May contract down over €65/t on its opening position, but it picked up to close the day at €937.75/t.

November oilseed rape also moved on Tuesday and closed down at €746.75/t versus €757.25/t on Monday.

US wheat and maize markets also had a big fall on Tuesday, but they picked up again before close of business.

Drivers this week

COVID-19 is featuring again in markets this week, with a substantial rise in cases in parts of China leading to a lockdown in some major cities and concerns around demand and logistics once again.

Elsewhere, there will be big interest in the spring planting intentions of growers in the US. The USDA is due to publish its initial report on Thursday of this week, along with its quarterly stocks survey. Analysts expect that farmers there will plant less maize and more soya this year due to high fertiliser prices.

While this report would normally affect markets, this reaction could be much greater this year, as any big change would come on top of current Black Sea concerns.

While Ukraine is again exporting grain by rail, this capacity is much lower than its sea-shipping capacity, so movement will be limited.

Elsewhere, Brazil is said to have lifted its tariff on US ethanol imports until the end of the year. This could mean increased domestic demand for US maize for bioethanol.

Native prices

Physical prices and forward price offers have not yet been affected by Tuesday’s drop and it is likely that it will take an agreement rather than talks to give a more sustained reaction in markets. However, both buyers and sellers are standing back for as long as possible.

Nearby wheat continues to be affected by supply tightness, but it is back slightly and trading in the €414 to €415/t bracket currently. Nearby barley is trading higher due to general scarcity, with prices in the €415 to €425/t range, depending on the day.

New-crop prices are up this week despite the market drop on Tuesday. December wheat is generally in the €325 to €330/t range to the trade, with barley now at €320/t.