Jonathan Lane, ADM Agriculture’s head of grain trading, comments on the Wheat Market

 As is normal for the time of year, the weather continues to sit in the driving seat on global markets, although currency is seeing significant movement.

Following the USDA report 13 days ago, the Chicago market saw some follow-through buying on the back of potential effects of dryness on new crop prospects in the US and Russia, but the rate of appreciation has slowed in recent days.

However, market eyes continue to focus on the ongoing lack of rain in Russia, as well as eastern Ukraine, and on the effects of recent snowfall on new crops in central/northern USA.

Market researcher SovEcon continues to forecast a 10-15% reduction in Russian winter wheat sowings, albeit rains in central regions will have helped over the last week.

Russia is expected to export around 50mln t of grain in the current marketing season, up 5mln on its  previous estimate. However, it remains to be seen whether any export quota will be introduced in the first half of 2021 to protect domestic supplies.  Exports to the end of Sep 20 were marginally down at 11.6mln t.

Currency has seen some significant shifts, with the US dollar hitting a seven-week low. Closer to home, the pound has seen substantial volatility this week as the Brexit negotiations rollercoaster continues. Values ranged from 1.28-1.315 against the dollar and 1.095-1.11 against the euro.

UK wheat futures old crop values have appreciated about £5/t on the week, following a similar pattern on the Matif. 

UK sellers of Oct-Dec 2020 wheat seem to have taken out most of the demand. However, Jan-July 2021 is a different picture, with very little market discussion on a physical side for feed grades. Flour millers have been more active.

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

US stock markets remain volatile as Covid-19 cases rise and politicians step up campaigns ahead of the US election next month.

US soybeans continued to edge upwards this week. Harvest is 75% complete compared with 61% last week and 58% average. The wetter weather will hinder progress.

USDA announced further sales of US soybeans to unknown destinations, but nothing additional to China.

China’s September soybean imports were recorded at 9.8mln t, bringing the total Oct-Sept total to 98.5mln t.

Brazil’s weather forecast is for showers over the next week, with heavier rains in the 6-10 day forecast, which will give farmers some confidence to plant. Commodities analyst Safras estimated last week that 6% of the Brazilian soybean crop had been planted, compared with 19% last year and a 17% average.

Decent rain was recorded in Argentina midweek. More is forecast but the two-week outlook is drier. Farmer selling is slow.

Palm oil remained firmer over the past few sessions, but struggled to get back to season highs. Prices had risen earlier in the week, due to ongoing production concerns, but weakness in mineral oil weighed on the market.

In Canada, farmer selling is slowing as harvest comes to a close. Combines are pretty much finished in western Canada and the national harvest pace is said to be ahead of the five-year average. High prices have prompted growers to sell more off the combine than usual.

Matif rapeseed firmed on the back of higher US markets. Rapeseed values returned to season highs seen in September, but are struggling to get to the magical €400 at present.

UK prices didn’t see much of the Matif benefit, with sterling having its biggest day against the euro since March on the back of yesterday’s Brexit talks. As the deadline draws closer, the pound is likely to stay volatile for the foreseeable future.