The return of extreme, hot weather to many parts of Europe and the US has put some upward pressure on grain prices over the last few days.

According to the Agricultural and Horticultural Development Board (AHDB), grain markets have mixed but broadly supported over the past seven days.

Sentiment was driven by United States Department of Agriculture (USDA) crop development data and persistent hot, dry weather in Europe.

However, gains were capped by the weight of large global supplies, ongoing northern hemisphere harvest pressure, and generally benign US weather.

North America grains

USDA’s June acreage and quarterly stocks reports were slightly bullish for wheat and mostly neutral-to-bearish for maize versus expectations.

The US all-wheat planted area came in at 17.3Mha, about 0.4Mha below trade expectations and a record-low since records began in 1919.

Meanwhile, June 1 US wheat stocks, at 25.0Mt, were a touch under expectations.

Both of these trends gave wheat a supportive tone.

For maize, the planted area was 38.6Mha, a little above expectations. June 01 stocks, at 134.5Mt, were still very heavy, so the report did not materially tighten the US maize balance sheet.

Furthermore, Statistics Canada also estimated wheat plantings at 10.2Mha, down 5.9% year-on-year and below the range of market expectations.

Despite this reduction in area the weather on the Canadian prairies so far has not caused too much concern for crop development, unlike in Europe.

European grains

Meanwhile, French maize crop ratings to the end of June fell to their lowest level in 13 years after the recent heatwave in Europe.

The good or excellent score dropped from 76% to 58% as hot, dry weather threatens further damage during pollination.

There were also cuts to wheat and barley conditions, though the winter barley harvest is advancing quickly with 83% of the crop harvested, up on the five-year average of 39% according to FranceAgriMer.

Key watch points

There are a number of key watch points to take account of over the coming weeks, where international grain markets are concerned

Crude oil prices have which has been volatile over recent months, a trend which may well be further impacted by the renewed attacks on Iran by the US.

Harvest progress in Europe and the Black Sea has been good, where winter crops still look set to perform well despite recent drought.

Weather trends in US over the coming weeks will also be important, with maize entering silking and becoming highly sensitive to any hot or dry spell.

Such a spell could quickly ripple through global markets, according to AHDB.