Grain price: Wheat drifting downwards
Wheat prices drifted downwards this week on LIFFE, MATIF and Chicago Board of Trade (CBOT) markets. In fact CBOT wheat went from a high of 566.75c/bu on February 18 to 529.25c/bu on February 27 – a drop of 37.5c/bu.
Concerns over the coronavirus were no doubt having an impact on markets, while large production estimates for the season ahead also played a role.
The spread of the virus to Europe has impacted on markets as traders take into account the effect it may have on consumers’ habits, as well as the effect on logistics.
Looking at grain production in the Black Sea, a milder winter has allowed crops to avoid frost kill and the amount of grain available for export is expected to rise.
Those exports are already up on last season. Ukraine grain exports are up by 23% so far – at 40 million tonnes. Wheat exports have reached 15.6 million tonnes and according to some reports may finish at 20 million tonnes.
Russian wheat exports are expected to reach 32.2 million tonnes. Exports for July to January were down 17% at 21.8 million tonnes (January 23).
US acres report
In the US, the United States Department of Agriculture’s (USDA’s) Ag Outlook forum predicts an increase in the area planted to both corn and soybeans in 2020, while the area planted to all types of wheat is expected to stay the same.
At the forum, the trade expected 93.6 million acres of corn; 84.6 million acres of soybeans; and 44.9 million acres of wheat to be planted. The USDA reported 94 million acres of corn; 85 million acres of soybeans; and 45 million acres of wheat.
That’s an increase in area of 5% for corn; and 12% for soybeans; while wheat is unchanged.
A note for any malting barley growers supplying Boortmalt – the Free-On-Board (FOB) Creil price for 2020 has not been available to AgriLand in recent weeks. However, on February 28, a spot price reported for old crop (2019 grain) was €161.00/t.
This is not too far off the last price obtained by AgriLand on January 22 when the same price was at €160/t. At that time, the 2020 price was at €177/t.