Farming News - Weekly Wheat & Oilseed market update
Weekly Wheat & Oilseed market update
Jonathan Lane, ADM Agriculture’s head of grain trading, comments on the wheat market
US wheat prices are virtually unchanged on the week as fundamentals fail to ignite further buying support, despite firmer maize and soybean markets.
Australian traders continue to offer wheat into Asian, Middle Eastern and African destinations as the country tries to find alternative outlets for its near-record harvest, which has coincided with the ongoing trade dispute with China.
Elsewhere, the picture is more supportive. In Argentina, the Rosario grain exchange has recently lowered its projection of the country’s 2020/21 wheat crop to 16.7mln t due to continuing dry weather.
The condition of Russia’s recently sown winter wheat crop remains a concern, despite some improvement seen in recent weeks following much-needed rainfall.
Ukrainian maize prices have resumed their upward trend. Agribusiness consultant APK-Inform lowered its forecast for Ukraine’s 2020/21 grain crop and exports after significantly reducing maize yield estimates. Limited farmer selling is also having an effect.
Ukrainian feed producers have asked the government to adopt an export quota for maize, fearing that rising domestic prices could push feed and food values higher.
Farm office FranceAgriMer has increased its forecast of French soft wheat exports beyond the EU, pointing to brisk international demand for the projected smaller surplus this season.
German export prices have been underpinned by hopes of new sales and a busy programme of vessels loading this month to Algeria and Pakistan, keeping values above French levels.
Algeria’s state grain agency OAIC is believed to have purchased about 600,000t of optional-origin wheat in a recent international tender.
UK futures are marginally higher on the week. Traders have become squeezed exiting their November position and plenty of demand remains for the first half of 2021.
The UK still has a balance sheet problem this season, with imports needed to fill the gap. Given the reduced EU surplus, it is uncertain where these increased imports will come from and what tariff terms will apply after 1 January.
Will Ringrose, ADM Agriculture’s head of oilseeds, comments on the OSR market
CBOT soybean prices reached new contract highs and it seems $12 is firmly in sight. Since the start of the week, prices have pushed through four-year highs.
Dry weather in South America remains a concern, but there is a slight improvement with some rain expected in parts of Brazil.
Brazilian agricultural consultant Datafro estimates that farmers have sold 53% of this season’s soybean crop, below some trade expectations that exceed 60%. At the moment plantings are estimated at 54% complete, 2% above the average.
There have been no reports of sales to China this week, despite rumours of some cargoes trading. This offered some resistance to the price rise. However, China’s pig numbers grew 27% year on year, so meal demand will remain firm.
World veg oil prices remain at contract highs, with soy oil hitting four-year highs and Malaysian palm oil prices touching eight-year highs. There are continued concerns over supplies, with Malaysian palm oil stocks reported at a three-year low while demand grows.
Despite Covid-19 cases rising, it seems food security remains a primary concern and, with heavy storms threatening some palm plantations in Malaysia, the global supply and demand balance sheet remains tight.
Canadian canola and Matif rapeseed also hit new contract highs. February Matif traded over €416 in yesterday’s session, to close at €414.50. Prices remain volatile.
UK prices are firm, following CBOT and oil market highs. Sterling firmed slightly in recent days, but UK prices remain close to season highs.