GRAIN MARKET UPDATE 16th MAY

Domestic Market

The Irish market remains quiet due to the time of year. There will be a carryover of barley stocks going into the next harvest however the majority of the wheat should be cleared. Planting is virtually finished apart from a little maize and potato planting. In general crops look in good condition as they have received adequate rainfall compared to other European areas.

Some merchants have offered green harvest prices of €151/t for wheat and €140/t for barley in the past week. The FOB Creil malting barley (July 2019) price dropped from €190 down to as low as €185 over recent days as rains in northern France and Denmark are seen to benefit malting barley yields.

Native/Import Dried Prices

International Markets

Over the past fortnight wheat, along with other grains markets have been driven by the trade dispute between the US and China. Prices initially collapsed last week but have since gained ground with Matif wheat futures now up over 4% for the week while US futures are up over 10%. In the main fundamentals haven’t changed but wheat has followed the moves in maize and many traders have massive short positions so if there is any weather news etc. it forces companies to cover these trades.

Recent rains across the EU have somewhat eased drought concerns but the agency Strategic Grains has again cut its forecast for this year’s wheat and barley production in the European Union. Its latest report reduced its projection for EU soft wheat production in the upcoming 2019/20 season to 144.2 million tonnes from 144.8 million forecast in April. However, this would still be 13% above last year’s drought-hit EU wheat harvest. For barley, expected production in 2019/20 was cut to 60.3 million tonnes from 61.0 million, 8 percent above the 2018/19 output.

Like wheat, maize(corn) futures were at yearly lows last week but have since jumped over 10% due to a combination of more positive comments on US/China trade talks from President Trump and the continuation of wet conditions in the US mid-west which is delaying planting of the crop. It is estimated that as of last weekend only 30% of the crop was planted compared to a 5-year average of 66%. Nonetheless analysts believe that the price rises are being mainly driven by short covering as there are still ample supplies of maize around the world following bumper harvests in South America so far this year and good predictions from elsewhere except the US so far.

Soybeans fell to 12-year lows last week but have since recovered some of the losses. However, there are huge stocks of the crop in the US and South America and with China’s sow herd down by 22% due to swine fever, this could curb demand for the product. In addition, if it gets too late to plant maize in the US, farmers will then default to soybean which will add further crop to the oversupply