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

Hemswell, Lincolnshire, 30 June 2022

Another negative week for prices as the advancing US harvest, continued talks about Ukrainian export corridors and concerns over global inflationary pressure and resulting commodity demand all weigh on prices.

Chicago wheat Dec22 futures fell just over $25/t week on week, while Paris wheat lost €11.25/t for Dec22. London wheat Nov22 futures ended over £10/t down over the same period.

The US winter wheat harvest is seen as 41% complete versus 31% year on year,  while harvest pressure is building elsewhere.

However, US crop ratings remain supportive to the market at just 30% good/excellent due to ongoing long-term drought effects.

France’s wheat crop rating fell again in the week ending 20 June, to just 64% good/very good condition, as harvest commences earlier than last year.

Argentinian farmers continue to drag their feet on sowing wheat for the 2022/23 harvest due to dry conditions, with Buenos Aires Grain Exchange trimming its estimate to 6.3mln ha as a result.

Russian grain exports are down 12% on the year, at 43 mln t as of June 26. This includes 36 mln t of wheat, a 5.5% fall. Further to this, Egyptian and Russian officials are discussing a deal to secure Russian wheat exports to Egypt.

Mykolaiv, one of the deep-water export ports still under Ukrainian control (Odessa being the other), has been rendered unusable. Satellite images detail major destruction in recent weeks as Russian bombardment increases. These two ports handle as much as 35% of the Ukraine’s grain exports in a normal season.

Egypt has contracted to buy 180,000t of wheat from India, less than previously agreed, but is looking at other options including using potatoes in bread making as it tries to trim wheat imports.

India’s annual monsoon is still seen below normal levels, with a deficit of moisture delaying sowings of summer crops. This remains a long-term concern.

UK wheat markets remain sluggish. Old crop is all-but-over as end-users seem well covered into the new crop position.

Barley harvest has commenced this week in an abnormally early period while UK wheat closes in on export competitiveness with the background of an expected large crop production.