Farming News - ADM Agriculture Wheat & Oilseed Rape Market Report
ADM Agriculture Wheat & Oilseed Rape Market Report
Jonathan Lane comments on the wheat market
Global prices have been pulled lower by the overall bearish trend.
The US market is down about $2/t on the week. The recent USDA report provided little comfort for market bulls as both US and global wheat stocks were raised compared with the previous month.
EU prices have eased €5/t as global weakness and cheaper Argentine/Black Sea wheat weighs on values.
UK prices have also fallen from the pre-Christmas peak, down around £4/t over the week. London futures for May 2022 have slipped around 5% since the December high and 10% from the contract high in late November.
US winter wheat sowings were reported at 34.4mln acres, higher than trade expectations and up 2% year on year.
Ukraine’s corn harvest is now seen at a record 40.5 mln t, which could lift exports to 33.8 mln t.
Buenos Aires Grain Exchange says the Argentine wheat harvest is nearing completion, with better yields expected to increase output to 21.8 mln t.
Conversely, Russian wheat shipments accounted to 21.6 mln t as of 30 Dec, down 18% on the year, with exports of all grains reported at 29.9 mln t.
Brazil’s National Supply Company (CONAB) has reduced its estimate of the 2021/22 Brazilian corn crop to 113 mln t, down 4 mln t compared with last month due to ongoing dryness concerns.
Turkey’s import tariffs on cereals have been eliminated through to the end of 2022 as the government tries to control food inflation.
EU soft-wheat exports had reached 15.1 mln t as of 9 January, up from 14.2 mln t year on year. However, French end-season wheat stocks are now seen at 3.65 mln t, the highest for at least six seasons, due to a reduction of exports to non-EU destinations.
The slight reduction in Defra’s final wheat crop estimate for harvest 21 released in December will do little to affect the UK’s balance sheet.
Short term, we believe the downward price trend will continue as demand seems very lacklustre. As we move into late Q1, and Q2 2022, demand should pick up due to the re-opening of the ethanol plant based in Hull, prompted by the government’s drive to E10 fuel.
Historically, current market values are still attractive and represent good margin aspirations to growers, even with higher input costs.
* For more information on the wheat market following the recent USDA report, catch up with head of grain trading Jonathan Lane and UK wheat trader, Freddie Humfrey on the ADM Agriculture YouTube channel.
Will Ringrose comments on the OSR market
Another very volatile week. Investors still have concerns over rising interest rates and in the impact of Omicron. The US dollar traded sharply lower, whilst crude oil bounced over levels not seen since October 2021.
Yesterday’s USDA report fell largely within trade expectations. US soybean yields increased from 51.2 to 51.4 bushels/acre, whilst the harvested area dropped very slightly to 86.3 mln acres (86.4 previously).
US stocks were higher than estimated at 350 mln bushels (340 previously). World soybeans stocks fell from 102 mln t to 95.2 mln t.
USDA reduced South American production estimates by 9 mln t. Brazilian production was put at 139 mln t compared with 144 mln t last month, and Argentina’s output at 46.5 mln t versus 49.5 mln t last month.
CONAB released its latest estimates, reducing the Brazilian bean crop by 2.4 mln t to 140.5 mln t.
South American weather still looks hot until rain arrives next week. The lack of rain in Argentina is not only stressing crops, but low water levels on the Parana river is causing freight issues.
Malaysian palm oil closed higher this week on a more bullish Malaysian Palm Oil Board report that stated stocks were 12.9% down at 1.58mln t, with production being 11.26% down from November. Veg oil prices dipped yesterday pre-report, but palm traded higher today.
Canadian canola values have slipped on the week as has MATIF rapeseed, which struggled to find any support in the past four sessions. Prices very quickly fell back to levels seen at the start of the year.
Sterling has firmed to 1.1900/1.2000, pressuring farm prices.