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Market Report

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27 January 2014 / Vol 8 Issue 30

Summary of the week

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Good global demand for wheat; export sales of US soyabeans and maize also remain stronger than expected as South American harvest approaches



Low snow cover in US and Eastern Europe currently, however, will become bullish if crop damage occurs due to low temperartures



Issues with transport logistics are slowing Canadian exports, which may increase carry-over stocks; rains forecast for South America; stronger Sterling adds downward pressure to UK prices

wheat icon


A lack of adequate snow cover was a key theme for grain markets last week, with concerns for parts of the US and Eastern Europe, particularly Southern Russia and Ukraine. While low snow cover does not necessarily present a problem, it does leave crops exposed should temperatures suddenly fall.  With several weather forecasts suggesting very low temperatures in the week ahead, these concerns have offered some support to wheat prices.

While the latest USDA forecasts indicated the global wheat market remains comfortably supplied, there were signs that the recent fall in price may have been viewed as a buying opportunity. Saudi Arabia, Algeria and Iraq made purchases of wheat totalling over 1.5Mt last week (see side for details). 

With rains forecast for South America this week, likely favourable for growing maize crops, stronger than expected US maize export sales kept the market largely stable.  The USDA reported net export sales (new commitments less any cancellations) for the week ending 16 Jan at 693Kt.  Further new sales totalling 370Kt were reported on Friday to Spain (150Kt), Egypt (120Kt) and Japan (100Kt).

oilseed icon


European rapeseed prices were relatively calm last week, with the May-14 contract in Paris taking support at the €355/t level, but remaining firmly below the €360/t mark – where it has been since early January. The same trend was seen with UK delivered values. Volatility has remained in soyabean market as tightening US stocks coincide once again with approaching South American supplies.

Canada remains a key watch area for rapeseed (canola) with Agriculture and Agri-Food Canada estimating exports this season at 8.2Mt – up almost 1Mt on the previous season. However, export progress in Jul-Dec 2013 was relatively poor with just 3.1Mt being shipped – the lowest level for the period since 2010 and down 11% the previous year (Canadian Grain Commission).

The poor pace is attributed to rail freight logistics issues and means the market will need to work hard if the current full season forecast is to be met. The situation is reflected in prices with Canadian May-14 futures prices in January at almost a €60/t discount to the Paris counterpart – typically this is more like €20-€35/t.

Strengthening Pound adds further downward pressure to UK grain prices

The positive economic news coming out of the UK in recent weeks has given support to the Pound against the Euro, although uncertainty remains. A stronger pound makes exports less competitive and imports cheaper, which adds further downward pressure to UK grain prices on top of global price movements.

Since July, the Pound has appreciated by €0.05. Based on wheat and rapeseed prices of €190/t and €350/t, this reduces UK prices by £6.77/t and £12.46/t respectively.

Price Summary

Generally global grain prices closed slightly higher on Friday, compared to the previous week. Wheat prices stabilised with concerns over the potential impact of forecast cold weather in the week ahead. For maize, stronger than expected US export sales helped prices remain just positive.

Note: the US futures markets were closed last Monday for Martin Luther King day.

For full prices, see the latest Market Data Publication.
For historic prices, see the Market Data Centre.

International Futures Prices (May-14)

Delivered prices

(as at Thursday)



N. West bread wheat

E.Anglia feed wheat

Yorkshire feed wheat

Central Scotland

feed wheat

Erith Oilseed Rape


Jan 14

Jan 14

Jan 14


Feb 14













Ex farm prices

(weekly average corn returns for w/e 23 January )


Bread milling wheat

Feed Wheat

Feed barley


Jan 14

Jan 14

Jan 14










(as at Fridays close)

£1 = Eur 1.2061

£1 = $1.6508

Eur 1 = $1.3687





Market analysis as it happens

AHDB/HGCA is changing the way in which it delivers grain and oilseed market analysis to the industry.

From 6 February, levy payers will have faster and more timely access to analysis on the HGCA website as well as through the fortnightly publication, Prospects. Analysis will be available as it happens via, the weekly Market Report, Twitter (#HGCAmarkets) as well as by email every fortnight.

For more information email

HGCA Events

AHDB/HGCA analysts will be speaking at a number of upcoming HGCA events. Click here to read the agendas and to book.

News in Brief

US soyabean exports continue to show strong progress and now exceed the USDA’s forecast for the entire season. By 16 January 42.1Mt were either exported or sold against the USDA’s total season forecast of 40.7Mt. This is likely to force export estimates higher, although cancellations may be seen as consumers look to benefit from the approaching record Brazilian crop – but want protection (in the form of US cargoes) from a replay of last year’s Brazilian logistical issues.

An earlier harvest is encouraging a strong start to Brazilian soyabean exports as shippers look to avoid delays later in the season. Reuters suggest that there is 2.5Mt lined up for export in February against just 0.96Mt in the same month last year. Logistical bottle necks are likely to be an issue later in the season, once the majority of the crop is available, so buyers are keen to move some volumes as early as possible.

Hardening of winter crops in Central and Western Europe has been significantly delayed by average temperatures through December and January, according to the latest EU Crop Monitoring (MARS) report. With cold weather forecast, the report adds that this could leave crops vulnerable to frost damage in eastern Germany, Poland, the Czech Republic and several Baltic states. Read the MARS report in full here.

Saudi Arabia bought 715kt of wheat for April-June shipment, including 595kt of hard wheat (min. 12.5% protein) and 120kt of soft wheat (min. 11% protein). Origins are at the seller’s option but wheat will be accepted from Europe, North and South America and Australia.

Iraq bought a total of 350Kt of hard wheat from Australia (200Kt), Canada (100Kt) and the United States (50Kt). The wheat is for delivery in May/June with Australian wheat the cheapest offer at $334.78/t (ciffo).

Reuters reported that in a tender last week Algeria's state grains agency bought around 500Kt of milling wheat. The wheat is reported to be mostly French.

The number of cattle entering US feedlots in December was larger than expected. The USDA reported placements in the intensive finishing systems at 1.68 M head, up from 1% from a year earlier. The largest uplifts were around the US Corn Belt and lower maize prices is reported to be a key factor.

EU import tariffs for maize have not applied in over two years but there is now less than €10/t between the EU reference price and world levels - based on a US maize quotation (FOB US gulf) plus freight. The variable tarriff system essentially puts a floor into the EU market by applying tariffs to imported maize when the reference prices falls below €157.03/t – more on the current rates in the Market Data publication (page 15).

Last week saw the release of UK Poultry statistics for December 2013, a major source of animal feed demand in the UK.  In December 72.3M broiler chicks were placed, up 1% on the previous year. Click here for full UK usage data.

Data out this week

Tuesday - UK Export Prices (AHDB/HGCA)

Wednesday - UK Supply and Demand Estimates (Defra)

Thursday - International Grains Council monthly report

Friday - UK delivered cereals and rapeseed prices (AHDB/HGCA); last trading day for MATIF Rapeseed Feb-14.

For more on information and data releases due in the next couple of months - click here.


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HGCA is the cereals and oilseeds division of the Agriculture and Horticulture Development Board. While the Agriculture and Horticulture Development Board, operating through its HGCA division, seeks to ensure that the information contained within this document is accurate at the time of printing, no warranty is given in respect thereof and, to the maximum extent permitted by law, the Agriculture and Horticulture Development Board accepts no liability for loss, damage or injury howsoever caused (including that caused by negligence) or suffered directly or indirectly in relation to information and opinions contained in or omitted from this document © Agriculture and Horticulture Development Board 2014. All rights reserved.

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