Wet weather is causing little concern in grain markets although some subtle volatility has occurred.  Wet weather for the start of 2014, where parts of the South of England and Scotland have seen more than 200% of the 1981 – 2010 average, is worrying some producers.

But whilst the weather may dampen some farmer’s confidence in the crop, weather in spring/summer will, as always, be what really matters.

In the marketplace, a period of calmness was followed by prices dropping slightly for both old and new crop.

According the latest data from HGCA, Nov-14 futures are setting new lows – levels below £150/t.

“With this in mind, a general ‘wait and see’ attitude may well develop towards the new crop, but higher prices in 2014 will need a reasonable weather event to occur somewhere in the world, particularly among the major market players.”

HGCA also reckoned global demand was strong and responding to greater grain availability with long term growth back on trend.

“Global logistics continue to be tested and could well be a key driver over the coming years as the reliance on global trade grows. Long term global price signals and new technology is shaping the global cropping mix,” HGCA’s Market Information Prospects said.

The report continued saying;

“Domestically, we should expect to see a more normal cropping mix with a noticeable reduction in the spring crop area. However, spring cropping is a useful tool for combatting wet autumns, as well as assisting weed control and spreading risk.”

In the U,S markets have continued to decline over the past ten days, with front-month CBOT wheat reaching a two-year low and dropping below a key $6/bu support level, according to Gleadell.

A severely cold weather period in the US has done little to influence the market as hard red winter regions have plenty snow-cover protection. More snow has fallen in Nebraska over the past couple of days although there are few concerns of winter kill for key growing areas of the Midwest.

The market this week has been awaiting tomorrow’s USDA crop production report, producing further downward momentum for wheat and corn in expectation of increasing global grain supplies and bearish planting intentions reports.

To add further to the decreased grain price, Informa last week raised its US corn yield estimate from 161.2bu/ac to 161.6bu/ac, which is someway higher than the USDA’s most recent forecast of 160.4bu/ac. This puts Informa’s production estimate at 14.162bn bushels, compared with the USDA’s 13.989bn.

Further afield, conditions across the Black Sea have also remained positive with the state of winter grains in the Ukraine and Russia reported to be the best for a number of years, producing encouraging yield expectations. UkrAgroConsult has recently predicted Ukrainian grain output to be 6% higher in 2014.