UK wheat markets are expected to remain bearish in the medium to long term, with large global supplies forecast to continue putting pressure on prices.
Both Chicago and Paris futures dropped last week, with improved crop conditions in South America and a large availability of exports from the Black Sea weighing on markets.
Conflict in both the Black Sea region and the Middle East are having an impact on global grain markets.
Ukraine’s agriculture ministry announced last week that grain exports had almost halved on year-earlier levels.
There were also reports on 26 October of a temporary suspension to Ukraine grain export routes due to potential Russian military attacks.
Rabobank analysts said: “Global wheat futures shrugged off the temporary closure of the new Ukrainian grain corridor last week.
“Although CBOT [Chicago Board of Trade] futures bounced slightly higher on the news, fears were quickly alleviated, as corridor operations slowly resumed.”
Meanwhile, Russian wheat estimates have been increased by 20% to 93m tonnes by the country’s ministry of agriculture.
The situation in the Middle East has provided another key watchpoint, and traders at ADM said that, although not specific to grain markets, it left the door open to some potential risk premium being added to the wheat price.
