Tuesday Market Briefing - 4th May 2021

Fuelled by global weather stories and changing crop prospects, grain markets remained extremely volatile trading in a £13/MT range on LIFFE. The further deterioration of the Brazilian corn crop pushed markets higher on Monday, but a change in US weather prompted farmers to continue in earnest with corn planting, and new crop values started to erode. For the US farmer, gross margins for corn are looking more and more favourable for Harvest 2021. Planting progress is now at 46% complete, well ahead of the five year average. Otherwise, the back-up plan to plant soybeans instead is also very positive, so the impetus to bring areas back into grain production is very high indeed.

For Western Europe, forecasted rain reached most growing areas improving soil moisture levels and crop conditions. Ukraine increased their wheat production figure to 28.6 mln MT – up from 24.9 mln MT in 2020. Temperatures are set to normalise from this weekend, which should help develop winter wheat crops that have previously sat dormant in dry conditions with low temperatures.

We will continue to keep an eye on China for further new crop demand purchases, plus any development of their Asian Swine Flu outbreak in parts of the country. While the current strength in grain markets has been very welcome by growers, it is historically very unusual to see such strength so early in the year. The new crop highs are normally experienced in June for corn and soybeans, and sometimes in July and August. An early start for high prices in April suggests that the bull run may not be over just yet.

Have a good week.

Bartholomews Grain Marketing Team