Grain Market Daily

Peter Collier


Peter Collier, Analyst, AHDB Market Intelligence, 02476 478851



Grain price spike continues

The global price spike has continued this week, with US maize (Dec-19) up $9.64/t (+6.6%) from Friday’s close to end yesterday at $156.10/t. Additionally, Chicago wheat (Dec-19) is also up $13.96/t (+8.5%) to $178.65 over the same period.

While the maize led price spike has largely been due to concerns about US planting delays as I covered on Wednesday, much will now depend on the next USDA Crop Progress Report and the Managed Money fund positions.

The Commitment of Traders report will be released later today and cover the positions as at Tuesday, with a likely reduction in short positions supporting this week’s price spike. Additionally, the USDA Crop Progress report will be released on Monday evening, covering this week’s planting progress. This will perhaps be the most influential report released so far this year, and will be updated at 4pm US Eastern Time and found here

Yet while the US has seen large price spikes, EU prices have received less of a lift.

  • Paris milling wheat futures (Dec-19) ended yesterday at €177.50/t, up €4.50/t (+2.6%) from market close on Friday
  • UK feed wheat futures (Nov-19), £146.50/t at yesterday’s market close, were up £4.80/t (+3.4%) this week so far

The continued slide of the Pound resulted in New Crop UK feed wheat (Nov-19) recording more of a climb than for Paris milling wheat (Dec-19). The value of the Pound has been falling in value every day for the last two weeks. At £1=€1.1431 as at 10am today, this is the cheapest the Pound has been since mid-February. With more political uncertainty, not just Brexit related but also party political, confidence in the Pound has been falling, supporting UK prices.

However, although both currency and US maize concerns have supported UK feed wheat futures recently, there are still multiple bearish factors which could see new crop wheat fall again.

As Alice Bailey talked about yesterday in her Global Weather Roundup, conditions across Europe and the Black Sea should lead to a much bigger wheat harvest year on year. Additionally, the UK will likely have a greater exportable surplus in 2019/20, potentially with very real risks to our trading ability depending on our departure from Europe.

Should the UK find itself as a third country facing tariffs and competing with a possible record Black Sea exportable surplus, the domestic market may well come under pressure in 2019/20.


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