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

Prices this week have been driven lower by ongoing optimism over US spring crop production, falling Russian export prices and concerns over the effects of Covid-19 on demand.

However, European wheat crop estimates continue to decline, while growers remain reluctant sellers. This has supported cash premiums.

In the UK, harvest activity is slowly progressing northwards, eroding some of the recent delivery premiums. However, apparently limited demand is matched by limited selling.

In more detail, US futures prices are down $8/t on the week and US maize prices traded down to a new contract low amid talk of higher yields and reduced domestic demand.

Russian wheat export prices continued to fall, pressured by improving yield projections and a higher-than-expected crop area.

France’s farm ministry cut its 2020 wheat production estimate to 29.7mln t, from 31.3mln t last month.

Germany’s 2020 wheat crop could fall about 12% year on year to 20.2mln t, according to the country’s statistics office, in a harvest estimate based on data gathered in late June.

Ukraine’s Grain Traders Union (UGA) has raised its 2020 corn estimates to 38.9mln t, with exports seen at 33mln t. The wheat estimate was left unchanged at 26.8mln t, with exports put at 18mln t.

Romania is expected to reap a meagre 5.5-5.6mln t of wheat this year, due to extreme drought. That marks a 42% fall on the year.

The US Attaché in Argentina reports that the country will produce less wheat and maize than previously estimated due to adverse weather conditions.

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

Tensions between US and China are now said to be easing, following a report suggesting senior officials from both sides will meet to discuss the "phase one" trade deal on 15 August.

CBOT soybeans traded lower to $8.50-$9. China returned to the US to buy 192,000t of 2020/21 soybeans. However, concerns remain that the expected buying pace will not be met before season ends.

US weather still looks favourable and soybean crop ratings improved by one point to 73% good/excellent (54% last year). Yields are expected to improve to 49-51 bushels/acre.

Soy oil outperformed soybeans and meal and followed crude oil prices higher. Palm is again under the spotlight due to lower-than-expected supply and increased interest from China.

Brazilian soybean exports for July hit a record 10mln t, taking the season’s total to 68mln t of which 71% went to China). Agroconsult estimates the country’s soybean plantings at 37.9mln/ha, more than 1 mln ha over 2019. Production is put at 132.6mln t, compared with 124.7mln t. in 2019.

Lower rapeseed yields in Ukraine has led Oil World to reduce its forecast acts to 2.8mln t, down from 3.5mln t.

In Europe, harvest is nearly complete. Yields are slightly improved in Germany and Poland, which has led Strategie Grains to revise EU rapeseed production higher for the first time in months. Crop estimates are now 16.8mln t compared with 16.5mln t in its last report.

Matif rapeseed fell this week after trading near recent highs. November futures fell below the recent range of €380-€385, closing at €379.25 for the first time since early July.

UK rapeseed prices have faced additional pressure from a firmer pound, which is easing back to recent highs after the Bank of England’s August policy statement stated interest rates and quantitative easing measures would remain unchanged.