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

The wheat market is all about weather for both northern and southern hemispheres, including how high new crop corn can rally and how much spill-over support enters the wheat complex.

US weather remains mixed, with good moisture seen for the Midwest, although dryness concerns remain in the southern and northern plains and into Canada.

In its initial report for 2021, USDA’s National Agricultural Statistics Service reported US winter wheat condition as 53% good/excellent, down from 62% a year ago, with 4% headed compared with 3% last year.

NASS also reported 2% of the intended corn acreage and 3% of the intended spring wheat acreage planted.

US prices are virtually unchanged on the week as the aftermath of USDA’s bullish corn stocks/planting data is slowly absorbed into the market.

The trade is expecting lower US corn stocks to be forecasted in USDA’s WASDE report due out tomorrow, mainly due to higher exports and domestic usage. This will intensify the focus on US plantings and the need to buy additional acreage.

Australia and Argentina have received beneficial rains ahead of sowing and the EU and Black Sea regions report favourable conditions. However, rain is slowing Argentina’s corn harvest, which was put at 8% complete as of 31 March.

Consultant APK-Inform sees the 2021 Ukrainian grain crop rising by 13% to 73.8mln t, allowing the country to export 54.2mln t of grain in the 2021/22 marketing season.

FranceAgriMer estimated 87% of the country’s wheat crop was in good/excellent condition as of 29 March, unchanged on the week.

In the UK, the recent cold dry spell and minimal rain in the forecast is starting to raise concerns over soil conditions, especially for recently sown spring crops and for winter crop development.

UK old crop prices are down £3-4/t on the week, while new crop slipped £1/t, with sterling slightly weaker.

More immediately, Egypt’s state buyer GASC purchased 290,000t of Russian and 55,000t of Ukrainian wheat for 1-10 August shipment at a recent international tender.

However, SovEcon has lowered its forecast for Russia’s 2020/21 wheat exports to 38.9mln t, as the country’s domestic market is adjusting to the new tax system more slowly than expected.

Ukrainian grain exports have fallen by 23% to 35.7mln t so far this season, including 14.4mln t of wheat, 16.6mln t of corn and 4.1mln t of barley.

EU soft wheat exports had reached 20.26mln t as of 4 April, down from 26.33mln t cleared by the same week last season but from a smaller crop.

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

US markets traded higher after last week’s USDA report, but remain rangebound this week. USDA’s ending stocks report will be out on Friday (8 April), providing further direction to what seems a bit of lacklustre market, with traders being very cautious about their next move.

South American weather is looking mostly dry with scattered showers, particularly Argentina. However, soybean crops have reached maturity so weather is not as important as it was. All growers need now is good harvesting weather to get crops in the shed.

Our attention now turns to North American weather, with planting just starting again after winter. There is rain in the upper Midwest and South East, although the plains remain dry as does most of Canada. This weather has been very supportive for US farmers to get out into the fields. However a cold snap, which is forecast for next week, may halt planting progress if it materialises. 

China has remained quiet this week. Rumours continue about the possibility of rising African Swine Fever cases, and lower soya crush margins are possibly reducing buying activity.

Matif rapeseed fell sharply on old crop with little demand around. The effects of the recent cold snap on flowering OSR will soon become apparent – fingers crossed there is not too much damage,

Canadian canola has not followed Matif down and remains $13 off the highs.

Crude oils started the week pushing two-week highs. Veg oil prices rebounded on news of fresh demand, particularly from India. However, towards the end of the week they started to follow CBOT down and traded below the highs as demanded tailed off.

Sterling started the week very strongly due to the UK strong vaccine rollout and confirmation that lockdown easing will continue on Monday. However, as the week went on the pound weakened due to concerns about the AstraZeneca vaccine. Overall, the sentiment is that it will rebound, it is just a matter of time.