Farming News - Weekly round up of Wheat & OSR markets
Weekly round up of Wheat & OSR markets
Jonathan Lane, ADM Agriculture’s head of grain trading, comments on the wheat market
Global prices have remained range-bound this week, caught between favourable weather for sowing and crop development in the US and ongoing dryness concerns across much of the northern EU and southern Russia.
US wheat prices are down $2/t on the week as spring plantings advance under favourable conditions, supporting talk of bumper US crops.
Recent rains have improved the condition of this year’s US winter wheat crop, although it still lags year-ago levels.
Favourable weather enabled Canadian sowings to advance last week, closer to the five-year average pace.
Russia, however, is expected to harvest around 120mln t of grain in 2020, slightly less than last year due to lower yields in several southern regions.
Ukrainian farmers have sown 96% of the intended spring area. Recent rains are expected to improve winter crop prospects.
The condition of the French wheat crop improved in the week ending 18 May, up two points to 57% good/excellent.
UK (London) new crop futures are up £2.50/t on the week, supported by ongoing dryness threatening crop prospects, and currency movements.
Current weather conditions in the UK are also affecting grass growth, which may increase compound feed usage over the next few months.
However, the higher-than-expected March import figure of just over 160,000t, a seasonal high, coupled with a seasonal low for exports of just over 40,000t due to high prices, suggests carry-out stocks remain on track for a historical high.
Will Ringrose, ADM Agriculture’s head of oilseeds, comments on the OSR market
Chicago soybeans prices have struggled to break nearby resistance levels. Yesterday rumours circulated that China may have purchased a further 10-12 cargos of Brazilian soybeans (Sept-Oct), which capped US price gains.
The trade remained hopeful that China would return to the US market for new crop soybeans. However, this is now in doubt as trade tensions between the two sides increase.
US soybean plantings continue at a record pace, with the forecast in Midwest showing normal rainfall and high temperatures for the next few weeks. Soybean plantings were reported at 65% complete, 10 points above the five-year average.
Crude oil prices stalled recently, with West Texas Intermediate closing below $35/barrel. Reports suggested larger-than-expected stocks and rumours of further price wars between Russia and Saudi Arabia
Veg oil prices followed crude oil levels higher earlier this week, with demand still a big question mark. Values then followed energy markets lower in the last few sessions.
Canadian canola plantings are estimated to have reached 38% in Saskatchewan and 50% in Alberta at the end of last week. Most major growing areas saw decent rains and below-average temperatures.
Chinese/Canadian trade relations may once again hang in the balance as Canadian courts proceed with criminal proceedings against the CFO of Huawei.
In Australia farmers braced themselves for one of the worst storms in decades, bringing severe rain. Winds swept across the parts of major growing regions, covering some emerging plants with windblown soil. Thankfully the storm was not as bad as expected, but it will take a few weeks to see what damage has been done to newly planted crops.
Matif rapeseed continues to trade within its recent €10 range. The market continues its trade-off between a well-covered old crop market and continued fallout through Covid-19 compared with a new crop weather market.
Here in the UK, as the season draws to a close, prices are trading at recent highs. Sterling has fallen against the euro since last week’s report, nearing 1.11 on the back of the proposed EU €500-700bn bailout and ongoing Brexit negotiations.