Jonathan Lane, ADM Agriculture’s head of grain trading, comments on the wheat market

USDA’s report for 2020/21 wheat issued towards the end of last week was generally as expected, slightly increasing estimates for global production, to 770.49mln t, and ending stocks, to 319.37mln t.

Maize production was eased to 1.162bln t as US yields were trimmed. Ending stocks were reduced to 306.79mln t.

US wheat prices remain unchanged on the week with little fresh fundamental news to stir markets. US corn edged up around $2.5/t) on the back of the USDA figures.

Egypt bought 175,000t of Russian origin wheat and 60,000t of Polish origin wheat this week for delivery mid November 2020, paying about $9/t above its previous purchase two weeks beforehand.

The US export pace continues at or slightly below expectations.

SovEcon has raised its forecast for this season’s Russian wheat crop to 82.6mln t, up from 81.2mln t previously.

Ukraine’s Grain Trade Union puts the country’s 2020 wheat crop at 26.6mln t, while maize output is pencilled at 35.3mln t. Exports are forecast to hit 17.5mln t and 29mln t respectively, while dryness for current planting remains a concern.

UK futures have fallen back £2-3/t from last week's highs. Domestic supply has picked up and the pound has appreciated from recent lows.

UK wheat values have followed other markets despite readily available imported feed wheat now arriving on UK shores.

Will Ringrose, ADM Agriculture’s head of oilseeds, comments on the OSR market

The market has reacted favourably to last Friday’s neutral to bullish USDA report.

Soybean production estimates fell in line with trade expectations, but US ending stocks for 2019/20 and 2020/21 were lower than expected, as were world ending stocks for 2020/21.

US soybean ratings declined a further 2% with good/excellent now reported at 63%, slightly under the five-year average. There are concerns about Hurricane Sally, which is moving across the Delta, and the heavy rains it brings with it.

Soybeans hit season highs this week, trading over $10. The market been overbought for a while now demand is coming forward from China, which seems to be in the market every day for US soybeans.

It’s also rumoured that China purchased new crop Brazilian soybeans at a premium to US prices. The US has sold approximately 3.6mln t of beans since the start of September. Managed funds are still heavily long on soybean futures.

China report an increase in the national pig herd, up 31% from last year, sows in particular were up 37%.

Crude oil recovered from the recent lows. The American Petroleum Institute reported lower stocks last week of 1.271 mln barrels, which saw West Texas Intermediate prices trade back to $40.

Veg oil markets continue to rally. Palm oil is trading higher on lower production and recovering demand. Soy oil is firming on higher soybean prices, whilst sunflower oil is trading at seven-year highs in Ukraine.

Matif rapeseed rallied beyond the recent resistance level of €385 to touch €393.25, a level not seen since the start of the year. Tight veg oil markets help support prices and persistent dry weather across the EU and Ukraine is also affecting new crop rapeseed plantings, which farmers are trying to get in before the end-of-September cut off.

Whilst indications are that markets are overbought and we may see some short-term correction, that doesn’t mean we couldn’t trade higher.

UK prices followed the rally higher but were capped by the rise in sterling. The British pound rallied over one cent against the euro in yesterday’s session and performed well against other major currencies after its heavy sell off last week.