Farming News - ADM Agriculture Wheat and Oilseed Rape Market Report
ADM Agriculture Wheat and Oilseed Rape Market Report
Jonathan Lane, ADM Agriculture’s head of grain trading, comments on the Wheat Market
US wheat prices have traded down a further $5/t over the week as continued improvement for new crop prospects weighed on values.
The latest weather outlook for the US spring remains favourable for farmers to plant what could be record corn and soybean crops. However, soils are much drier than the past two years and this could come into play later on.
Other areas have also reported good new crop prospects. Consultant SovEcon raised its forecast for Russia’s 2021 wheat crop to 79.3mln t, saying crop conditions had improved dramatically due to a mild winter and ample precipitation in recent weeks.
Ukraine’s government said favourable weather could help farmers increase the grain crop to 75mln t this year, up 9.5mln on last year, with exports reaching 53mln t, up 7.5mln t.
FranceAgriMer says the condition of the French wheat crop declined slightly last week, with 87% of the crop rated good/excellent, down one point on the week, but still much improved from last season’s 63%.
Strategie Grains left its estimate of the EU/UK 2021/22 wheat crop unchanged month on month at 129.6mln t.
EU/UK prices have also eased during the week, following the weaker global trend, although some support has come from a firmer US dollar.
Market participants will now wait until the release of key USDA planting/stocks data, due out next Wednesday, with the focus heavily on the corn and soybean numbers.
Turning to old crop, Ukraine’s grain exports have fallen 23.4% on the year to 34.01mln t, with traders selling 14.01mln t of wheat (80% of quota), 15.43mln t of corn and 4.05mln t of barley.
Strategie Grains trimmed its forecast of 2020/21 EU/UK soft wheat exports to 25.2mln t.
Wheat exports from the EU had reached 19.34mln t as of 21 March, down from 24.65mln t cleared by the same week last year.
China continues to sell wheat from state reserves, with a further 1.63mln t traded last week, although prices paid were lower due to declining domestic corn prices.
Will Ringrose, ADM Agriculture’s head of oilseeds, comments on the OSR market
Chicago soybeans have been mixed this week, trading sharply lower on weaker outside markets, but recovering on better veg oil prices.
Predictions of a bigger US corn area in 2021 is offering resistance to new crop. However, some in the trade believe current corn usage is higher than reported, or the crop size is wrong, particularly as farmers aren’t selling. They expect the 2020/21 carry-out will be reduced, tightening supply.
Weather is looking favourable in Argentina, with most of the country receiving rain midweek, which should help late soya development. Brazil still looks warm and dry.
China/US trade talks resumed last week with both sides complaining about each other’s policies, which pressured markets. There are still a lot of unknowns surrounding African swine fever in China, which will be followed closely. China did buy corn, but no soybeans, with crush margins continuing to be pressured on lower meal demand.
Crude oil is affected by the blockage in the Suez Canal with Brent crude rallying 5% on Wednesday, although there is no fundamental shortage and oil stocks remain high.
Veg oil markets were firm again. Asian markets all rose sharply this week. Palm oil played catch up from soy oil’s recent rally on the back of continued talks of cleaner energy and higher usage in airplane fuel.
Matif rapeseed traded lower to start the week, but has made some gains since then. Old crop coverage is getting better and demand for oil is starting to pressure prices.