International wheat prices, after having increased in January, prompted by a lower than expected Argentine harvest and a smaller area planted to winter wheat in the United States, declined in most of February. Some support was received in the last week of the month from reports of a deterioration of yield prospects in southern United States, but this was countered by continuing slow export demand. On average, since last November export prices of wheat and wheat futures have fluctuated within a narrow range after the sharp decline which occurred between May and October. The US wheat (No.2 Hard Red Winter, f.o.b. Gulf) averaged USD 241 per tonne in February, 6 percent lower than in January and close to quotations in the previous two months. As compared to the same month last year, US wheat was in February some 46 percent lower reflecting the much improved supply situation following a record 2008 wheat harvest.
International maize prices fell in February in line with those of wheat. Sliding crude oil futures and expectations of further cuts in the demand for feed and for ethanol production, coupled with larger availability of feed wheat form Black Sea origins weighed heavily on the market. These factors outweighed the effect of reports confirming the sharp drop expected in maize output in Argentina and Brazil and of rumours that China will procure an additional 10 million tons of maize for its reserves in an effort to boost domestic farm income. Similar to wheat, after the sharp decline since last year’s peak in June, the US maize price has fluctuated within a narrow range in the last four months. The US maize (No. 2 Yellow, Gulf) averaged USD 163 per tonne in February, 5 percent below the previous month and close to prevailing values in late 2008. As compared to the same month last year, US maize was in February about 26 percent lower.
International rice prices increased in February continuing the slow rise which began in late December. The strengthening of rice prices is in spite of indications of much improved supply situation following larger 2008 crops in Asia and slow demand for both Thai and US exports. The price of the benchmark Thai white rice 100% B averaged USD 625 per tonne in February, USD 14 per tonne up from the previous month and USD 42 per tonne higher than in December, and well above (35 percent) the price at the same time last year. The recent rise of international rice prices probably reflect earlier measures to reduce supplies available for export in Thailand and the recent increase in the minimum export price in Viet Nam. However, in view of the expected reopening of exports from India and Egypt in the next few months, and the large exportable stock available in China and Thailand the recent strengthening of the rice market may be short-lived.
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