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

The latest USDA report released on Wednesday suggests that US farmers have sown less corn (maize) than the trade expected.

Although higher than USDA’s March figure, the 92.7mln acre forecast is about 1mln acres below most predictions. 

With almost half the corn in what are described as drought-stricken states, concerns continue to rise over final harvested yields.

The weather situation in Canada continues to be of concern as strong winds and drought conditions are affecting crops. Stats Canada reported 2021/22 all-wheat sowings at 23.357mln acres, roughly unchanged from their March estimate, but still down 6.5% on the year.

Elsewhere, prospects look good. SovEcon is now pegging the Russian 2021 wheat crop at 84.6mln t, as improving prospects in the southern region could result in near-record yields.

It’s a similar situation in the Ukraine. Estimates for the 2021 wheat crop have been raised by 300,000t to 29.2mln t, while the country’s corn crop is now seen at 38.3mln t, due to higher plantings and favourable soil/moisture conditions.

Sowings in Australia and Argentina are benefitting from ample moisture.

In summary, the lower-than-expected US corn acreage and talk of potential further corn production losses in Brazil will prompt some short-covering, providing spill-over support into the wheat market. 

However, global wheat inventories are more than ample, and apart from the US, other wheat markets may react more slowly as harvest commences.

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

Another volatile week for the oilseeds complex. Funds juggled positions accordingly ahead of the month-end, quarter-end and Wednesday’s USDA report.

The bullish report very quickly pushed soybeans up to 90 cents higher on the day. US soybean acres for 2021 were estimated at 87.55 mln acres, slightly down on the last report but well below the 88.9 mln acres that the trade expected. However, there are still some acres to be planted as of the survey date.

The forecast is for rain in the Midwest and Delta, but for dry weather in the Plains and West-Midwest. Temperatures are set to get hotter next week onwards, which will be closely watched.

It was rumoured that China was back in the market for US soybeans, but nothing has been reported.

Oil markets are all firm, with Asia following the US higher.

Temperatures in Canada remain at record levels. Crops in the northern and west-central parts of Alberta have good soil moistures, but crops in south Alberta and Saskatchewan are becoming stressed. Temperatures are set to cool as the week progresses, but yield estimates are likely to fall.

Matif rapeseed recovered very quickly from the losses we saw at the end of last week, trading close to €40/t off the lows to levels not seen since the start of June. UK prices have recovered but remain off season highs.