Farming News - Wheat & OSR Markets - it is hoped forecasted wet, windy weather won’t cause too much harm to crops.

Wheat & OSR Markets - it is hoped forecasted wet, windy weather won’t cause too much harm to crops.

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

Despite recent weakness in corn and oil markets, US wheat has posted steady gains in recent days as talk of declining US, Canadian and Russian wheat crops intensifies.

Almost a fifth of US spring wheat was reported as harvested by 1 August. Crop ratings are improving week on week, although at just 10% good/excellent the figure is well below the 73% recorded at the same time last year.

SovEcon has cut its forecast for Russian wheat production by 5.9mln t from its previous estimate, putting output at 76.4mln t mainly due to lower yields and a reduced crop area.

Russian farmers had harvested 12.8mln ha of wheat as of 2 August, slightly behind last year, with average yields about 5% lower at 3.48t/ha.

Things look brighter in Argentina, with Buenos Aires Grain Exchange reporting the corn harvest as over 80% complete, with production forecasts for corn and wheat left unchanged at 48mln t and 19mln t respectively.

However, in Brazil, consultancy AgRural reports that after drought and frosts the country's farmers are expected to harvest 56mln t of second crop corn, about 19mln t lower than last season.

There are signs that rising global wheat prices are starting to choke export markets. In its latest tender Egypt’s state buyer GASC was offered just five cargoes, and only 60,000t of Romanian wheat was purchased at about $13/t above last week’s tender.

EU soft wheat exports have got off to a slow start, with the tally for the 2021/22 season to date reaching 963,000t as of 1 August compared with 1.48mln t the same time last year. However, the commission reported that some data was missing from this season’s figure, but this will catch up.

France’s agriculture ministry is forecasting the country’s soft wheat crop at 36.7mln t, down from 37.1mln t in July, citing that ‘concerns are focused on the quality of the crop’. The French harvest is still a stop/start affair with more wet weather forecast.

The UK harvest remains sluggish, with early reports from the south/south east showing proteins and specific weights slightly down year on year. However, in East Anglia and the Midlands, better proteins are being reported, but with more variable specific weights.

It is too early to be definitive regarding UK yields and quality. It has to be hoped that the forecasted wet, windy weather won’t cause too much harm to crops.

Supply shortages in the north and far west of the UK have maintained decent spot premiums, although these will quickly diminish as supply issues start to be addressed. If growers have dry wheat ready to move, it is still very much worth checking available values.

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

Markets across the board saw pressure on Friday, with traders taking a risk-off approach and squaring positions for the month-end.

Rains in the Dakotas pressured soybean prices this week. Crop ratings were left unchanged from last week at 58% good/excellent compared with 72% last year.

China remained absent from the soybean market, but was an active player in the meal market. It has been six weeks since the country’s last confirmed trade with the US , and this continued absence is making the market nervous amid fears of another lockdown as Covid cases continue to increase. 

Continued drought in Argentina still hinders river logistics.

Oil markets traded lower and crude oil markets fall sharply on demand fears. WTI oil is now trading at $68. Palm oil traded off its recent highs on demand fears and lower exports, but equally recovered on lower production numbers.

Canadian canola prices fell sharply again to three-week lows. Crop conditions continue to deteriorate with rains being viewed as disappointing. If anything, crop expectations are now falling below 15mln t. News that China is looking to release state reserves of rapeseed oil into its domestic market added pressure.

Matif rapeseed prices trade off recent highs, but recovered from Friday’s sell-off. Macro weakness won’t help values, but the sharp fall in Canadian production will leave a gap to fill in the EU balance sheet.

UK rapeseed yields are variable to date but land conditions and good forward price prospects are resulting in good rapeseed seed sales. 

* For more information on the rapeseed market with ADM Agriculture’s Will Ringrose, please go to the ADM Agriculture YouTube channel.