Grain prices were down this week and show no signs of improvement.

At present, there are no major weather concerns for crops and harvest is fast approaching in many countries, so weather effects on European crops are unlikely to hit markets.

Currency continues to play a role in markets and make EU grain less competitive.

With grain prices low at this time of year, buyers are no doubt buying ahead and getting their stocks in place.

Maize remains a watch point. November maize has been reported at €215/t, level with barley and €10/t below wheat, as buyers look to be expecting it to drop further.

If maize drops to low levels, it is not good for the Irish wheat and barley prices, as with no incentive to use Irish grain, many feed producers will obviously opt for the cheaper option.

If reports of more contract cuts at Boortmalt come into effect, then there will be even more feed grain on the market, competing for sales.

Ukraine bulletin

This week, the EU released a bulletin on crops in Ukraine. The main headline was that there is an average yield outlook for winter crops, despite a strong rainfall deficit in the east.

Wheat and barley production was estimated down 7% and 27% respectively from the five-year average in the report, while maize production was estimated down 10%, sunflowers were estimated down 6%, but soybean was estimated up 66% and rapeseed up 12% from the five-year average.

On 5 June, Ukraine’s tariff-free trade with the EU came to an end.

Reuters reported that agricultural goods in 2024 accounted for 60% of Ukraine’s total exports and the EU bought 60% of those goods.

Bioethanol

Bioethanol is not something we think of regularly when it comes to grain markets in Ireland, but, in recent years, closures of UK bioethanol plants have been of interest as more grain comes to market if it is not being taken.

According to the AHDB at the Cereals event last week, approximately 2m tonnes of cereals can be processed in UK bioethanol plants, producing about 1.4bn litres of bioethanol per year, which can be used to add to petrol.

US bioethanol has had a tariff of 19% coming into the UK. However, the new US-UK trade deal allows 1.4bn litres of US bioethanol to enter the UK without any tariff. That is the entire size of the UK market.

The deal poses a serious threat to the industry and is something to watch out for, as, if plants close, that wheat will need to go somewhere and this may be on a boat.