Farming News - More Crop Damage Probable in US thanks to Irma - Weekly Wheat and OSR Report

More Crop Damage Probable in US thanks to Irma - Weekly Wheat and OSR Report

 

WHEAT

 

After posing contract lows last week, US corn and wheat markets have bounced higher, trading up 15c ($6/t) and 20c ($7.35/t) respectively on the week.

 

Support has come from fund short covering and on talk that spring corn and soya crops will experience a dry finish to growing conditions this season. 

 

Crop development reports for US corn places the crop behind the five-year average on the denting and maturity phases, as a cooler period of weather seems to have slowed progress.

 

Additional support has also surfaced from the battering of the US Gulf from tropical storm Harvey, which not only cancelled grain shipments last week, but also caused some crop damage in the area.

 

With another storm, Irma, due to sweep into Florida in the next few days, further crop damage is probable.

 

EU prices have followed the US market higher, trading up €2/t on the week, although market dynamics remain unchanged.

 

Aggressive early season shipments from the Black Sea, amidst rising harvest projections, are seen weighing on European prices, especially with EU exports still running 52% behind last season’s pace.

 

UK prices are trading almost £3/t higher on the week, despite a slightly firmer currency, as a supply squeeze has lifted delivery premiums in the nearby position.

 

DEFRA reported wheat on-farm stocks as of 30June at 526,000t (England and Wales), down 59% on the year. Stocks of home-grown wheat held in ports or by co-ops and merchants were reported down 45% year on year at 657,000t, but imported stocks were up 24% year on year.

 

Given the extended harvest period one can understand grower reluctance to sell, hence the rise in the premiums. It may be that in a few weeks, selling into the current spot rally may have been a missed opportunity.

 

In summary, markets have bounced, but now where do they go?  Fundamentals remain bearish with ample supplies of coarse grains, likely to be confirmed by the USDA in next week’s report.

 

Until then, the UK’s spot squeeze continues, although long-term it is not sustainable.

 

OSR

 

The CBOT soybean market moved higher over the week as traders took profit following recent declines, and the market is also mindful of the potential damage that may result in the south-east US from Hurricane Irma.

 

The EU commission discussed today reducing the anti-dumping tariffs that are currently in place on third country bio-fuel imports. News wires have reported that the EU have agreed that these tariffs will be reduced and this could be potentially damaging to the EU crushing industry.

 

In the EU, the market had been quiet, with growers more interested in completing harvest and getting on with land work rather than moving grain. 

 

UK prices had remained static, with the volatility in sterling off-setting movements in Matif rapeseed futures, but with the announcement on the biodiesel anti-dumping tariffs, the Matif rapeseed futures are sharply lower.