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

Major wheat futures have all risen in the past week as the generally tight feel in the wheat market continues.

ICE (London) Nov 21 wheat rose £4.10/t, Matif (Paris) Dec 21 wheat is up €6.50/t and CBOT (Chicago) Dec 21 wheat climbed 1.5cents/bushel.

The UK wheat harvest, one of the most challenging for a long time, is now all but done. ‘Variable’ remains the best descriptor, with significant volumes of wet wheat, a broad spectrum of analysis and a lack of samples/analysis still hampering movement.

Consumer demand remains stunted. Broiler placements are down about 8-10% due to a lack of manpower. This trend is echoed elsewhere in the livestock sector.

Looking to Europe, the final French quality numbers were released on Wednesday. Only 25% of the crop is deemed to have met the minimum requirements for the Matif milling wheat specification. Despite this, the EU export pace remains strong at over 45% ahead of last year’s figures.

USDA released its latest world supply and demand estimates at the end of last week. The report was slightly more bearish than anticipated, although the stunted reaction from the market would suggest that larger stocks were already priced in.

Main highlights included a 3.4 mln t % increase in 2021/22 world wheat production to 780.3mln t, compared with 775.8 mln t for last season.

Global ending stocks were forecast at 283.22mln t, around 4mln t more than the market consensus prior to the report. However, the US is expected to record a slightly reduced figure of 16.73mln t.

Russia’s wheat harvest is now pegged at over 87% done, with the main growing regions complete. Domestic prices continue to rise, impacting the floating tax structure and limiting the competitiveness of Russian wheat into the global market. This is helping to maintain an air of tightness to the global stock sheet, despite the increased ending stocks from USDA.

The market continues to assess the impact of the latest Statistics Canada numbers. Tuesday’s update posted a further 1.2mln t reduction in Canada’s wheat production, reducing 2021 output by 38% to 21.7mln t, compared with 2020’s 35.2mln t.

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

CBOT soybeans were mixed this week, but have currently traded off recent lows. 

Funds are winding out of their long positions ahead of harvest. Facilitates in the Gulf seem to be struggling to get back online after Hurricane Ida, delaying soybean exports from the region.

Rain is spreading across parts of the US, following storm Nicolas, whilst other states remain hot and dry. Tropical storm Nicolas has now become a hurricane. This will bring wet weather and potentially further damage. 

In China, delayed US exports out of the Gulf have pushed Chinese buyers to purchase eight cargoes of soybeans from Brazil for October. USDA also reported cancellations of 196,000t to China and 132,000t to an unknown destination.

Crude oil prices bounced on lower US production and stocks at two-year lows. Palm oil prices rebounded on increased exports out of Malaysia during the first half of September.

Soy-oil bounced late in yesterday’s session. The National Oilseed Processors Association estimated soy-oil stocks at 1.66 bln pounds, which was above trade estimates resulting from higher crush figures. Malaysian palm rallied again following lower production.

In Canada, StatCan shocked the trade by lowering production estimates by nearly 2mln t to 12.78mln t,  1mln t below trade estimates. Futures reacted by trading sharply higher following the report, before settling in the afternoon session. 

Harvest continues in the country despite some rain delays in some regions, and reports of high winds threaten any unharvested crops. Prices moved up again, but remain off highs.

Matif rapeseed touched new contract highs for the third session running this week, with prices now at season highs. Sterling has firmed, which pressured UK prices slightly.