INTERNATIONAL prices of wheat, maize and soybeans firmed in recent weeks, as supply prospects for 2019/20 worsened, according to the Agricultural Market Information Systems (AMIS) market monitor November report overnight.

Wheat prices rose following a downgrading of production prospects, significantly, in major exporting countries Australia (down 1.6Mt), Kazakhstan (down 1.5Mt), US (down 502,000t) and Argentina (down 402,000t). (chart 1.)

Chart 1. November projected increases (black type) and decreases (red type) compared with the October parameters for wheat. Thousands of tonnes. Source: AMIS (Click to expand.)

Chart 1 also shows the downgrade was offset by raised production estimates in EU and Russia whose increased export by 1Mt and 500,000t respectively partially offset lower figures, shown in red type, from other exporters.

Price index strong gain

October saw prices rise 4 per cent over September across the Grains and Oilseeds Index (GOI) collated by the International Grains Council, though the GOI was 5pc below year-ago level.

In the sub-indices of GOI, wheat this month was 6pc higher, maize 6pc and soybeans 4 pc.

While wheat has been firming for a couple of months, the turnaround in maize has been especially sharp. (Chart 2.) Maize prices had dipped to lowest in more than a decade in September and rose sharply as wet US corn crop weather and USDA in October recalculated, downward by 8.4Mt, its corn 2019 beginning-stocks in the US and raised its average US farm price projection 6pc for the current crop year.  Concerns in South America about meeting production and export targets also fuelled the rally.

Chart 2. Grains and Oilseeds Index (GOI) red line, and sub-indices for wheat (light blue line), soybeans (mauve), maize (yellow line) and rice (fawn). Source IGC published by AMIS. (Click to expand.)

Soybean price rises were partially caused by production and export worries in the
US and South America, but US soybean futures were boosted by reports of tariff-free purchases by China of US soybeans in sizeable volumes.

Southern hemisphere producers are entering their harvest period at this time of the year.  Conditions in Argentina and Australia are significant.

Key points from AMIS world wheat crop outlook:

• In Argentina, conditions are mixed with dryness in the west during the key development period reducing expected yields. By contrast, good soil moisture conditions in the east of the country have raised expected yields above average.
• Australian conditions are poor across much of New South Wales and Queensland due to severe dry and hot conditions throughout the season. Yields across the remaining states are expected to be about average.
• Conditions are favourable for winter wheat in China, with above-average rainfall benefiting crop emergence and early-stage development.
• In Canada, spring wheat is under mixed conditions as harvest is behind due to excessive moisture and delayed crop maturity. Winter wheat is sowing under generally favourable conditions albeit later than normal harvest of spring crops.
• EU field preparations and sowing have begun for winter wheat under favourable conditions.
• In the Russian Federation, conditions are favourable for winter wheat sowing and emergence with an estimated increase in total sown area compared to last year. In Kazakhstan, spring wheat harvest is wrapping up under generally favourable conditions, with little to no impact from frosts in the northern regions.
• Ukraine winter wheat is under mixed conditions due to severe soil drought in the central part of the country, which along with the resulting delayed sowing, has resulted in a lag in crop development heading into winter dormancy starting next month.
• US winter wheat is under favourable conditions for sowing and emergence, except for some dry conditions in Texas.

Source: AMIS

Grain Central: Get our free daily cropping news straight to your inbox – Click here