Weather and war fuel grain market volatility – Anglia Farmer

Global wheat stocks were the tightest for nine years, said independent consultant James Bolesworth of CRM Agri. The impact of weather variations in key production areas would have an important bearing on prices over coming months, he added.

“We’re currently in an El Nino period, but that’s expected to be followed by La Nina later in the year, which often brings dry conditions to the US and rains to Australasia, and has historically been associated with periods of increasing grain prices.”

Weather-related impacts on European production have been largely factored into markets. Forecasts suggest a UK crop of 12-13m tonnes this harvest compared with some 14mt in 2023 and 15.5mt in 2022. This means imports will need to supplement domestic requirements.

Recent European wheat prices have been under pressure from competitively priced grain from Black Sea regions. Meanwhile, higher interest rates have reduced demand for commodities among investors.

Lower interest rates could be positive for commodity markets – but volatility will continue to be driven by macroeconomic factors. These include war in Ukraine, disruption to shipping through the Red Sea and fluctuations in global energy prices.

Outlining some key tips for marketing grain, Mr Bolesworth said growers should have a plan and set targets for when to sell, recognising what price they needed to cover the production costs.

Growers should also consider market reports from impartial and neutral sources to avoid confirmation bias and remove the risk of making decisions based on emotion.

Remembering that price is not the same as value, farmers should also be prepared to cut their losses, keep records of all buying and selling decisions – as well as the factors that have driven them, said Mr Bolesworth.