December Arable Update

A lack of farmer selling is currently characterising the marketplace. This is clearly bullish for local market prices, but, by definition benefits few sellers because, as soon as anybody decides it’s a price worth selling into, it breaks the pattern.  Late December is a predictably quiet time of year for buyers too so arguably, a lack of consumer buying might be keeping the merchants’ books balanced.

The USDA global wheat production figures were increased by 5 million tonnes in December, with consumption rising by only 1 million. With global stocks at a relatively comfortable position, this publication did not have a major impact on prices. Global maize production rose by only 1.5 million tonnes whilst consumption increased 3.5 million. This is the crop with tighter stocks levels so the change is more relevant here. Unfortunately for farmers and other long-holders, prices responded by actually falling because traders expected the figures to be even higher.

The oilseed market is also relatively quiet, the main changes being based on global announcements of revised crop sizes. Brazil has increased its soybean estimate, bringing it a snip above the US production to put it at the number one position. The USDA has not yet recognised this change in position in its monthly figures keeping Brazil at 0.6 million tonnes below the US figure of 88.6 million! It’s a small point but more pertinent politically than it is for the marketplace. Brazil is now clearly the leading exporter of soybean.  Meanwhile the UK has been importing oilseed rape as is often the case at this time of year as the southern hemisphere crops become available.