The most significant price drops were observed in maize and oilseeds. The Food and Agriculture Organization (FAO) reported a 2.2% decrease in the grain price index for February compared to January. This ongoing trend in global markets results from intense competition among exporters and recent crop introductions from the southern hemisphere, leading to notable reductions in maize and oilseed prices.
Agritel, an agriculture and food industry market analysis platform, notes that while the euro's weakening against the dollar (falling below USD 1.08) has somewhat improved the competitiveness of European grain exporters, decreased demand challenges the sale of European grains both globally and domestically. The March maize futures price on the MATIF exchange dropped to €181.5/t, €5.25/t less than the previous week. Analysts attribute the EU market's pricing pressure to maize imports from Ukraine and Brazil, with rapeseed prices also falling by 1.75% to €414.25/t.
There is growing eagerness among operators to offload large wheat stockpiles in anticipation of the upcoming harvest in five months.
Regarding European wheat trade, there was a notable export increase from countries like France, Poland, the Baltic States, Germany, Bulgaria, and Romania in mid-January, with France and Romania each shipping out 4 million tonnes of wheat, among others. However, market prices dropped to new lows of €210.75/t last week. Agrateur observed a 6% decrease in EU wheat exports in January (18.9 million tonnes) compared to the same period last year, alongside a 16% increase in imports (7.4 million tonnes) over 2023. A significant portion of wheat imports (67%) originated from Ukraine, underscoring the discontent of EU farmers with this trend.
Ukrainian agribusinesses reported a decrease in January export volumes compared to December, while Russian grain exports saw a 23% increase from the previous year, totaling 38.5 million tonnes. The Association of Russian Grain Exporters noted that Russian wheat exports have reached 29.5 million tonnes since the season's start, up 13% from the previous period, with major importing countries including Iran, Egypt, Bangladesh, Saudi Arabia, and Turkey, subsequently supplying the EU.
A record harvest was announced by the FAO, with global pearl barley production hitting a new high of 2.836 million tonnes, up 1.2% from 2022. Coarse grains production also saw a significant increase, with higher yields in Canada, Mainland China, Turkey, and the USA attributed to an enlarged maize cultivation area.
The anticipated rise in global grain usage to 2,822 million tonnes between 2023 and 2024, a 1.2% increase from the previous year, is driven by higher feed usage, especially in the EU, Australia, and the USA. Consequently, the FAO forecasts a comfortable global grain stocks-to-use ratio of 31.1% for 2023-2024, an improvement over the previous year's 30.9%.
Future projections indicate a slight 0.8% growth in global grain trade, primarily fueled by an increase in large grain transactions, whereas global wheat and rice trade is expected to decline.
