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

US wheat prices are down about $1/t on the week after earlier weakness was negated by talk of drier weather returning to the US, South America and the Black Sea region.

What effect the outcome of the closely fought US election will have on the US and global economic, financial and commodity markets remains to be seen.

US exports continue to slow amid concerns that prices are too high, along with increasing cases of Covid that may reduce global feed demand.

In Argentina, Buenos Aires Grain Exchange maintained its forecast of 2020 wheat production at 16.8mln t, despite recent rains. This follows months of dry weather that hit the central farming region and continues to affect the north.

Australian farmers have started what appears to be a bumper harvest, and are expected to produce the third-biggest wheat crop in 30 years, just as concern over Black Sea conditions lifts global prices.

China is expected to ban imports of Australian wheat. The grain is the latest to join a list of blacklisted products as tension intensifies between the two countries.

Russia has harvested 132.6mln t of grain before drying and cleaning from 95% of the area, with yields averaging 2.9t/ha, according to official data.

International Grains Council raised its forecast for global wheat production in 2020/21 by 1mln t to a record 764mln t. But IGC trimmed its forecast for global corn production by 4mln t, to 1,156mln t, reflecting diminishing outlooks for crops in the Ukraine and the EU.

Ukraine’s pig and poultry growers associations have asked the government to set a maximum volume on maize available for export, due to a sharp rise in price that could push up domestic meat values.

French soft wheat exports to non-EU countries in October reached a monthly high for this season, at 703,000t. This was buoyed by a record volume of exports to China, reported at 524,000t.

UK old-crop prices are up about £2/t, with currency range-bound. Reports that severe differences remain between the UK and EU after recent trade talks may see sterling weaken as the 31 December deadline approaches.

There is still much uncertainty about the UK’s trading terms with the EU after 1 January 2021. This has already created significant import programmes that need to be completed before the turn of the year.

Looking further ahead, UK plantings are underway again as a spell of dry, colder weather has arrived with expectations that we will see a significant rebound in UK wheat plantings.

French farmers had sown 66% of the expected soft wheat area for next year’s harvest as of 26 October, up from 45% a week earlier.

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

CBOT Soybeans rallied from recent lows to touch contract highs yesterday. Since the start of the US election campaign soybeans have seen big gains, exceeding highs made in late October. Meal and oil prices have also made significant increases.

US weather in the 6-10 day forecast looks dry, with temperatures above average. US harvest progress is reported at 87% compared with 71% last year and a five-year average of 83%.

South American weather remains a concern. Northern Brazil still expects decent rain over the next 5-10 days but the south and Argentina will remain dry. This is causing concern over crop planting and development and will delay the supply of new crop beans to the market in early 2021.

There are no USDA sales to report. China has been absent from the US market for 19 days, amid rumours it has purchased two cargoes from Brazil. That said, it is also rumoured that Brazil is enquiring about US soybeans.

Asian veg oil markets saw significant gains in recent days, led by Malaysian palm oil which touched four-year highs. October stocks are reported to be lower than expected on the back of weather events and reduced labour availability.

Asian rapeseed oil prices remain firm, within touching new contract highs this week.

It was a turnaround week for the Matif as prices rallied to contract highs again in Thursday’s session. February broke through the €400/t barrier to close at €400.25. Prices had followed outside markets higher and were helped by improved veg oil prices.

Sterling remains in the balance, trading at over 1.11 down to 1.10500 in the last few sessions. Brexit negotiations remain tough, whilst the Bank of England made the decision to support the economy during the lockdown by boosting quantitative easing by £150bln.