ADM Agriculture Wheat Market Report 

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

Hemswell, Lincolnshire, 11 November 2021

US markets regained their impetus following Tuesday’s USDA supply and demand report that indicated increased import requirements globally and declining export availability.

The bullish slant from the USDA report, plus talk that Russia will soon announced its restricted export quota for the new year, was enough to trigger a fresh wave of speculative buying on all markets.

The current unsustainable export pace seen currently in both the EU and the Ukraine is also expected to keep wheat markets underpinned.

EU soft wheat exports reached 9.8mln t as of 7 November and may be higher given the reporting delay on French exports. But the EU does not have the capacity to replace the tonnage that might be held back by Russia this season. Wheat demand will need to be rationed, possibly by consumption switching to maize, and this will need watching over coming weeks.

The UK is basically following global markets higher. 2022 prices have also reached season’s highs, albeit at a hefty discount to 2021 levels. This gap will have to be closed and the likelihood is that, despite higher UK plantings, new crop should appreciate against old crop sooner or later.

Current high prices may be with us for some time and we probably need a couple of good harvests globally and domestically to replenish inventories.

Adding to the bullish tone, continued heavy rain in Australia, especially over the eastern side of the country, is threatening the overall quality of this season’s wheat crop.

Ukrainian analysts talk of the driest autumn for 20 years, which means half the country’s winter wheat crop is not well established.

On a brighter note, Buenos Aires Grain Exchange reported that recent rains in Argentina would help propel corn sowings and development of the wheat crop.

French soft wheat plantings were 80% complete as of 1 November, compared with 75% last year.