The Agricultural and Horticultural Development Board (AHDB) is expecting grain prices to strengthen over the next fortnight.
Where wheat is concerned, global supply uncertainties, underpinned by the escalation of the conflict in the Black Sea region and lower production outlooks, could support prices in the short term.
However, favourable weather in the US and larger crop forecast in Australia could stabilize prices longer term.
Meanwhile, stronger demand for US maize and potential supply risk for wheat could support prices in the short-term. However, in the longer-term, ample global supply forecasts are expected to keep price increases in check.
Grain prices
In the case of feed barley, short term prices are being supported by demand in the Middle East and the broader grains market.
But, overall positive southern hemisphere yield prospects cap the longer-term outlook.
Recent days have seen Ukraine attack Russia with after US government restrictions on these weapon systems had been launched.
In response, Russia allegedly retaliated by firing an Intercontinental Ballistic Missile (ICBM) into Ukrainian territory.
This prompted short covering by speculative traders as it increased concerns about potential disruption to the global grain supply.
Meanwhile, the International Grains Council (IGC) has tightened its global wheat outlook on supply concerns, while consumption remains firm.
Specifically, the IGC forecasts global wheat production for 2024/25 to edge lower by 2.0Mt from last month to 796Mt.
However, world maize output is now expected to reach 1,225Mt in 2024/2025, up by 1.0Mt from October.
Specifically, where Europe is concerned, recent reports are indicating that 90% of the winter wheat planting has been completed by November 18, up from 78% a week earlier and above last year’s 73%.
Also, the country’s winter barley planting campaign is now 96% complete. In tandem with this, maize harvesting in France has reached 82% completion, up from 71% within a period of seven days but below 97% relative to mid-November 2023.
Winter wheat is developing well in the US, with United States Department of Agriculture (USDA) reports confirming a notable improvement in crop conditions.
By way of contrast, LSEG has reduced its forecast for Australia’s 2024/2025 wheat production by 4%: now estimated at 29.5Mt.
This will remain a key watchpoint. In September, Australia’s government expected the crop at 31.8Mt this year, which is about 20% higher than both last year and the 10-year average.
