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Mintec Category Index for US cereals maintains an upward trend in October 2021

November 22, 2021

2 mins read

The Mintec Category Index (MCI) for US cereals has continued an upward trajectory since September 2021, mainly supported by a persistently high wheat price, which has been mirrored across the grains complex. The index rose for three consecutive weeks to reach USD 234.55/MT on 17th November, representing a rise of 36.8% year on year (y-o-y).

US wheat prices are currently trending at a 9-year high, primarily supported by tight global supply and robust demand. The October average price of US wheat on the Chicago Board of Trade (CBOT) increased by 6.8% m-o-m to USD 278.5/MT due to lower global production estimates by the United States Department of Agriculture (USDA) for the 2021/22 season. The revision was led by expectations of significant production cuts in Canada, the US and Iran. In addition, ending stocks were revised downwards and are at the lowest since the 2007/08 season, thus supporting the CBOT wheat price. Moreover, higher input costs such as fertiliser prices, energy and freight rates are also supporting grain prices.

 

In addition, the average CBOT maize (corn) price in October increased by 4% m-o-m to USD 214.7/MT. The price rose in line with higher wheat prices and weather-induced lower maize yield estimates in the Western Corn Belt for the 2021/22 marketing year (MY). Rising demand prospects for maize, primarily for ethanol, are expected to tighten 2021/22 maize supplies. In addition, US maize exports are projected higher for 2021/22, while exports from other top exporters are forecast to be reduced - led by lower supplies from Brazil, Russia, and Ukraine.

Barley has also been on a bullish run and continues to track the wheat market, thus supporting the US cereal MCI. The US barley supply remains tight, with yields for 2021/22 MY estimated to be the lowest since 2007/08 MY due to a drought in the Northern Plains and Pacific Northwest, key barley-producing regions. Barley prices are likely to remain high, reflecting the firmness in the wheat and maize market. The US wheat and maize prices are likely to be determined by the crop developments in the global market.

 

Topics: Grains & Feed
Zanna Aleksahhina
Zanna Aleksahhina

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