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

Global markets have posted substantial increases as they adjust to the potential loss of supply from the Black Sea region following Russia’s invasion of Ukraine, with any major retracement unlikely until a peaceful compromise can be resolved.

The US market had traded up almost $1/bushel ($35/t) week on week before moving higher again Thursday morning.

EU and UK prices have followed the firmer global trend. Matif closed Thursday up €46 on the week at €315/t, while London closed up £27 at £245.25/t.

UK markets remain underpinned by global events, with delivered premiums still firming to the more north and western parts of the country, reflecting sharp rises in haulage rates.

While it is difficult to look beyond the current Russia/Ukraine conflict, global exporters’ stocks are at a historically low level. A further bumper crop will be needed for any replenishment of stocks, placing weather centre stage.

Current weather is not ideal in the US, where further declines in winter wheat crop ratings are reported in key producing states, and the Black Sea regions.

EU crop monitoring unit MARS reported that persistent rain deficits in Mediterranean regions have led to drought and damage to wheat crops, especially in Spain and Portugal.

In addition, we wait to see how the market will react to further drought effects in South America on crop size, particularly soybeans but also maize.

Drought will increase import requirements in North Africa and the Middle East.

Egypt purchased 180,000t of Romanian wheat for April 1-10 shipment in its latest international tender.

Algeria reportedly purchased 720,000t of wheat, probably of Romanian, Balkan and Black Sea origin, at its latest international tender.

EU soft wheat exports had reached 17.7 mln t as of 20 February, up from 17.3 mln t a year earlier, with Algeria, China and Egypt remaining the top three destinations.

In short, it looks a market to stay long. At some point judgement will need to be made on whether old crop prices come back to meet new crop prices, or vice versa, bearing in mind the market needs almost perfect weather from here on in.

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

All agricultural commodities are trading sharply higher as Russian forces advance on Ukraine.

Chicago soybeans traded at nine-year highs on Thursday, close to $17.5 on the front month position.

China continues to buy US soybeans this week with USDA announcing purchases on a daily basis. It is still rumoured that the Chinese government is selling state reserves on to the market.

Weather in South America remains unchanged, with showers across the southern regions of Brazil into Argentina, but that may not be enough to improve crop prospects.

Crude oil prices had dropped back from highs briefly, but rallied sharply on Thursday. Brent crude is trading above $100/barrel, WTI at $97.

Veg oil markets found support from reduced exports and uncertainty of supply. Malaysian palm closed 142 ringgit higher (2.43%) on Wednesday and prices on Thursday morning were 400 ringgit higher on the March position. Soy-oil is trading at highs.

Canadian canola values have followed the wider complex higher and overnight prices are sharply higher. March values are now trading at new contract highs.

MATIF rapeseed grinded higher this week, but given the strength on other markets this morning it is likely that prices will jump further on the open. Markets are going to stay very volatile until the situation is resolved.

Sterling is trading close to 1.2000, but this had little impact on prices.