Watch out for ripple effects: how distant events can shape local grain prices
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When you’re watching grain markets day to day, it’s easy to focus on local factors – weather, yields, logistics – and forget that the biggest price shifts often start thousands of miles away. In the past few weeks, events in the US and Argentina have shown how quickly distant developments can ripple through to UK prices.
The US government shutdown: flying blind without USDA data
The US federal government shut down on 1 October after Congress failed to pass a new funding bill. Around 750,000 federal workers have been furloughed, with pay suspended for roughly 2 million. With US lawmakers unable to vote through a revised bill yesterday, this has now become the longest full shutdown in US history.
One knock-on effect of the shutdown is that the US Department of Agriculture (USDA) has gone dark – meaning no fresh data on yields, stocks or exports.
Most notably, the influential WASDE (World Agricultural Supply and Demand Estimates) report – which traders worldwide rely on – has yet to be released.
With no new information, the market has somewhat lost its bearings. Chicago soft red winter wheat futures for December 2025 dropped from 509.25 cents/bushel (the equivalent of £138.92/t) on 1 October to 496.75 (£136.90/t) on 13 October, before recovering to 503.75 cents/bushel (£137.78/t) at the end of last week.
Chicago maize has drifted too, moving in a narrow range around 416 to 422 cents/bushel.
As European and UK grain benchmarks take their cues from Chicago trends, London and Paris futures have drifted – staying within a narrow range while traders hesitate to commit in an uncertain market.
US and European wheat futures have traded within a narrow band since the US government shutdown started
For UK growers, this lack of momentum matters – because when prices stall and sellers hold off from selling, importers step in to fill the gap with cheaper foreign grain. That keeps a lid on domestic prices, even if UK fundamentals look strong.
Argentina: policy shifts in a troubled economy
Argentina has been battling high inflation and the devaluation of the Argentine peso since the late 2010s. While the UK buys little Argentine grain directly, Argentine government policies during this period have caused a ripple effect on UK grain prices.
Most recently, on 22 September, President Javier Milei temporarily scrapped export taxes on grains and their by-products to attract foreign currency and boost the peso. The policy was meant to last until the end of October or until exports reached $7 billion. That limit was hit within just three days.
Chicago wheat dipped by 2.4% almost instantly on the announcement, dragging Paris and London contracts with it, before a quick rebound once the short-lived nature of the policy became clear.
It was a sharp reminder of how quickly government policies can change and how directly those changes can affect global markets – and therefore UK prices.
With Argentina’s midterm elections due on 26 October, we should be watching closely for any last-minute vote-grabbing policy shifts. Any sign of renewed intervention could trigger another round of volatility in the grain markets.
Meanwhile, the results of the elections will be seen as an indication of the level of public support for President Milei’s reforms.
Tracing ripple effects can give you an advantage
Even though these events feel far removed from the UK, they shape the sentiment, data flow and pricing benchmarks that ultimately filter through to our own grain markets. Whether it’s Washington politics or Argentine fiscal policy, what happens abroad doesn’t stay abroad.
Tracing these knock-on effects can give you a head-start on potential factors influencing domestic grain prices. To name just a few:
French presidential elections might raise concerns about a “Frexit”, weakening the euro and making European exports more competitive relative to UK grain
OPEC+ oil production decisions affect fertiliser and transport costs and the subsequent global rise in input costs can push UK grain prices higher
Canadian rail strikes can cause export bottlenecks, lifting Chicago wheat prices and consequently putting upward pressure on UK feed wheat futures
Changes in EU environmental regulations can affect grain production estimates in Europe, placing pressure on UK prices despite no change in domestic yields
Keeping an eye on the bigger picture helps you make informed marketing decisions at home. In uncertain times, staying alert to global ripples can help you catch the waves before they reach your own farm gate.
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This article is for general information only and is not an instruction to trade. While we make every effort to ensure the accuracy of the content at the time of publication, Hectare Trading makes no guarantee regarding the data provided.