LONDON, ENGLAND – Much of the coarse grains market has developed a bullish tone in recent weeks, with thinking dominated by the effect of weather on the US maize crop, while uncertainties over exports from Ukraine added to the upward pressure.

In its Grain Market Report of July 20, the International Grains Council (IGC) said its index of global maize prices had dropped by 1%, but that US futures gained 3% over the month.

“The market initially worked lower, pressured by larger-than-anticipated planting intentions and a bearishly-interpreted July WASDE report,” the London, England-based Council said. “However, losses were undone over the past week, as market attention refocused on drought and unfavorable cropping weather, including in Illinois and Iowa.

“The halting of the BSGI (Black Sea Grain Initiative, which Russia pulled out of on July 17) and mounting worries about disruptions to Black Sea supplies provided additional support in recent days.

“Lackluster international demand and strong competition from Brazil weighed on Gulf export premiums, with quotations down by $9 month-over-month, to $245 fob (Gulf). Reflecting expectations of solid buying and with farmers turning into more reluctant sellers, export quotations in Brazil rose by $22, to $234 fob (Paranagua).”

Values in Argentina were little changed month-over-month, at $230 fob (Up River), the IGC added.

“Producer selling was reportedly subdued, partly on renewed rumors surrounding the potential introduction of a preferential exchange rate scheme,” the IGC said.

The IGC’s global price index for barley was up by 6% from the previous month, “with gains in European and Australian values more than offsetting decreases in Argentina and the Black Sea region.”

For sorghum, the IGC noted that “after slumping to a near-three year low in mid-July, US Gulf export quotations were broadly unchanged month-over-month, at $278 fob, boosted by a recent bounce in CME maize futures.”

Turning to rye, the IGC noted that the “nominal rye price in Russia (inland terminals) declined further, quoted at a 13-year low of $82,” in a move that was “likely tied to seasonal weakness.”

The IGC also reported that milling rye prices in the EU (Germany) were a touch softer, at $193.

In its Corn Market publication for week 29, the European maize producers’ organization CEPM acknowledged that “despite heavy stocks confirmed by the USDA’s July report, US prices rebounded… on the back of reassuring news about demand and concerns about the Ukrainian corridor.”

On July 10, 22% of US maize was in flower, compared with an average of 21% at that date (2018-2022), CEPM said.

“Thanks to the latest rains, 55% of maize was in ‘good-to-excellent’ condition, up four points on early July,” CEPM noted.

The US Grains Council, in its July 20 Market Perspectives, noted a rise of 6.3% in maize futures that week, “after a combination of Russia ending the Black Sea grain export corridor and hot, dry weather forecast for the US Midwest sent markets on a sharp rally.”

“The combination of geopolitics and weather risk prompted a fierce round of short-covering and panic buying earlier this week that seemed to fade on Thursday,” the USGC said. “The current consensus is that markets have largely adjusted to the end of the Black Sea agreement, but the ongoing drought and weather concerns for the US will likely keep markets moving higher.

“US weather forecasts have shifted negatively for crop production with unusual heat and below-normal rainfall predicted into early August. The hot, dry weather comes as roughly half the US corn crop will be pollinating in the next few weeks.”