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

Another week in which markets have been driven by US spring crop concerns.

Much of the corn belt is still suffering from an unseasonable spell of hot, dry weather and yield expectations for US corn and soybeans declined after a further week with very little rain.

US prices continue to firm as a result, up $7/t on the week.

EU prices also rose, by just over €2/t, supported by firmer global markets and continued talk of Russian interest in French wheat.

EU’s crop monitoring unit (MARS) has slightly raised its EU wheat yield estimate to 5.55t/ha. However, it has sharply reduced its maize estimate to 8.01t/ha, down from 8.21t.

UK (London) prices are up just under £2/t as harvest delays continue to provide a supply squeeze, underpinning delivery premiums and farm gate prices.

With most northern UK wheat either still in the field, or in need of being dried, the shortness of supplies has continued to support spot prices. Given the unpromising forecast, it remains likely that this squeeze will continue for a few weeks. However, at some stage, the backlog of wheat will be made available.

Harvest prospects are improving further east. SovEcon has again raised its forecast for Russia’s 2020 wheat crop, this time by 300,000t to 81.2mln t.

Ukraine’s wheat and barley harvests are virtually complete, with farmers reaping 26.2mln t and 8.7mln t respectively before drying and cleaning.

Kazakhstan will have 7.5-8mln t of grain available for export during the 2020/21 season, based on an improved harvest outlook of 18mln t.

Egypt’s state buyer GASC continues its purchasing strategy, sourcing a further 530,000t of Russian wheat in its latest tender.

Looking at more distant prospects, harsh frosts over recent days have added to severe dryness in punishing Argentina’s recently sown wheat crop.

Meanwhile, Argentina’s 2020/21 corn planting area is seen at 6.2mln ha, down from 6.3mln previously due to dry weather in key producing areas.

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

Harvest in Europe is now just about finished, with disappointing yields in the UK and France being offset to some extent by better crops in Scandinavia and the Baltics.

The latter prompted a raft of selling in mid-August, which has now come to an end as growers focus on wheat harvest and drilling next year’s crop.

Crushers in Europe appear to be well covered into Q4 2020, but with European farmers now disengaged from the market, any short could find it difficult to originate seed. The market will be reliant on third country imports as we go through the season.

Current weather conditions in Australia will need to be watched closely. Prospects look great and, with timely rains boosting the crop, output could now exceed 3.5mln t.

It’s a similar picture in Canada. With harvest just getting started yields are looking good but, with strong demand from both Europe and China, we should expect to prices to remain generally supported.