Prices for feed grains have fallen considerably throughout June, pressured by improved global conditions. The value of UK feed wheat futures (Nov-24), averaged over £217 per tonne in May, but just £205 per tonne in the month to 26th June. The decline in UK futures prices is the result of falling global prices. New crop (Dec-24) US wheat futures fell consistently during June, towards the contract low, set in March 2024.
The US wheat harvest is progressing well, and the increased liquidity of global grain has put downwards pressure on prices. In addition, the harvest of Brazil’s second and largest (Safrinha) maize crop is adding to the volume of available grain. The increased availability of grain has so far outweighed the fact that global grain stocks-to-use ratios are set to be tighter year-on-year; posting an eighth consecutive annual decline.
The months immediately before harvest are often some of the most volatile and reactive to weather and harvest progress stories. For prices to rise, almost continual negative stories are needed. There are some events that could offer support to grain prices. If they materialise there may be opportunities to gain on short term market rallies.
There has been excess heat and rainfall across the US corn belt. This has led to flooding in some key grain producing regions, most notably Minnesota. However, assessments of the US maize crop remain largely positive, although these assessments do not fully capture recent negative weather. One watch point for grain markets is the US acreage survey. The survey will be published on Friday 29th June, giving the clearest indication yet of the scale of the US maize and soyabean crops.
Another area of concern had been Russian wheat crops, which were hit by unfavourable weather in April and May. Whilst early information points to good yields, this is based on a small proportion of the harvest. Russian analytical firm SovEcon point to the potential for yields to come down as harvest progresses.
As mentioned, the value of UK grain has followed the global market lower, for both old and new crop. At the same time, the value of UK milling wheat over feed wheat has grown, averaging £68 per tonne, ex-farm in June. The value of pulses have also increased, with little availability of old crop, and some time before new crop is available. That said there is also little to no demand at present. Domestic cereal, oilseed and pulse prices can be seen in Key Farm Facts.
Oilseed rape continues to look attractive for planting this autumn. Dependent on available moisture, many will be anxious to drill early following the wet 2023-24 season. Provided soil moisture is sufficient prices approaching £400 including bonuses will be attractive. Of course, much will also depend on pest pressure.