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

US wheat has had a rollercoaster week as support from declining crop ratings was negated by a commodity sell-off prior to the Thanksgiving holiday. Overall, values fell just over $3/t.

Although it is more competitively priced against other origins, US wheat is still not seeing export demand. Black Sea values have edged lower after high demand and concerns over sowing delays in Ukraine pushed the market beyond what shippers and importers were willing to pay.

SovEcon has raised its forecast for Russia’s 2020/21 wheat export by 1mln t to 40.8mln t, due to a higher crop estimate and the current pace of exports.

In addition, Australia’s crop is expected to be reported in excess of 30mln t next week, at a time when there are ample global stocks.

Looking ahead, US crop planting could increase to a record next year if prices and weather holds, USDA officials reported, adding ‘there is no indication that demand is going to soften any time soon’.

On a more bullish note, talk of continued dryness in South America, linked to the La Nina weather pattern, has traders talking down soybean and corn production estimates.

Buenos Aires Grain Exchange estimates corn plantings as 31% complete against the expected area of 6.3mln ha. Wheat harvest is 20% complete, with production estimate unchanged at 16.8mln t.

EU prices hit contract highs this week. Continued interest from China and German wheat competing into North Africa are keeping the balance sheet uneasily tight. Although EU exports are running lower year on year, domestic and international demand will need to reduce over the remainder of this marketing season.

UK prices have remained steady, with futures edging up a fraction on the week. With the seasonal logistics starting to kick in and the need for the UK to start pricing in additional imports, ex-farm prices should remain supported.

Sterling has continued its firmer trend, helped by reports that a post-Brexit trade deal can be reached prior to the 31 December deadline, which hopefully will result in more transparency on how the UK will trade internally and externally before 1 January 2021.

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

US stocks traded at highs before consolidating prior to the long weekend for Thanksgiving.

CBOT soybeans hit $12, but struggled to make any additional gains. Markets sold off before the long weekend, apart from soy oil, which closed slightly in the green.

In South America, rain is now falling in parts of Argentina, with the showers expected in southern parts of Brazil in the next few days.

In Brazil, plantings were updated, but vary as to whom you speak. They are estimated to be between 75%- 81% done nationally, compared with 79% last year, but as said previously, some of this area will have to be redrilled.

There are rumours that China sold back between two and five  cargoes of soybeans from the US, switching supplies to Brazil. However, nothing has been confirmed. This pressured prices, whilst South American weather remained supportive.

Chinese crush margins have weakened and buying interest has dropped off. It’s still thought that China will return to the US market at some point in the season.

Veg oil prices traded close to highs at the start of the week. Malaysian palm oil is at eight-year highs on weather concerns. Prices were pressured later in the week.

At the start of the week Canadian canola hit seven-year highs. Matif rapeseed also rallied to new contract highs. Prices saw pressure later in the week, with weakening CBOT soybeans and lower oil markets.

Matif values fell back sharply trading €6 down in some sessions. UK prices remain close to contract highs. Sterling remains rangebound, reacting to the latest UK GDP data being reported to be the worst for 300 years, down 11.3%, and the ongoing trade talks.