Nearby grain prices dropped back this week, but are still relatively steady. Matif wheat for December was at €206/t on Friday afternoon (October 30). At the same time last week it was trading at €210.25/t.
According to the Agriculture and Horticulture Development Board (AHDB), pressure on wheat markets is being driven by "the wider sell-off on global financial markets".
La Nina weather event
According to the World Meteorological Organisation, there is a 55% chance that a La Nina weather event will persist through December and February.
La Nina weather events occur every few years and can result in increased rainfall in Australasia and cool and dry weather in South America.
A La Nina event has the potential to impact on crop plantings, growth and yield. This week, the AHDB reported that the La Nina weather event that occurred from 2010 to 2012 contributed to the 2010-2013 southern US drought that affected agricultural land.
The AHDB also reported this week that dry conditions in the US are supporting global wheat prices as gains were seen in global grain futures prices this week.
Helen Plant, a senior analyst of grains and oilseeds with the AHDB, stated: "In the winter wheat growing states, the dryness is now the most widespread and intense for mid-October, since 2012."
USDA crop progress report
The corn and soybean harvests are progressing well in the US. Winter wheat planting is currently ahead of the average for the time of year, but many soils still remain under pressure. Looking at the overall figures, 18% of soils were reported to be 'very short' of moisture and 28% were reported to be 'short' of moisture in the topsoil in this week's report.
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European crop reports mixed
Following drought conditions in many parts of Europe earlier this season, parts of Europe now have a rain surplus, while some are in a rain deficit.
This month's MARS Bulletin published on October 26 outlined that crop yields are forecast to decrease.
Yields of grain maize, potatoes, sugar beet, sunflowers and soybeans were all revised down from the September report. However, yields of potatoes and soybeans are still estimated to be up on the five-year average.
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The report also noted that: "The sowing campaign of winter cereals started mainly in dry conditions across Europe. While it was concluded mostly in October in northern regions, it was delayed in many western, central and eastern regions – initially due to dry soil conditions for most of September, and later due to overly wet conditions."
On the continent this week, feed barley (delivered Rouen) was trading at €187/t on Friday afternoon (October 30), while Free-On-Board (FOB) Creil malting barley was trading at €192/t at the same time.