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

US markets have weakened slightly during the past week, although quality issues in Europe are keeping the markets underpinned.

Heavy rains in France have severely delayed harvest and seriously affected wheat specific weights.

Hopes that the situation would improve as the harvest moved north were dampened as recently cut wheat struggled to reach the 76kg/hl specification.

This has strengthened Matif, which has moved to new highs in recent weeks, providing an inverse in the market as market shorts try to deliver a spec that isn’t there.

Although there has been only a limited effect on yields, the amount of quality wheat for export will be much reduced and feed wheat supply will be much higher than normal, which may increase the need for feed exports beyond the EU.

Germany’s agriculture ministry predicts a 3% fall in the country’s grain production this harvest, with wheat production pegged at 21mln t due to rain affecting crops at the key grain-filling stage.

Despite the problems experienced by major EU producers, wheat exports, albeit early in the season, are running about 9% ahead on the year, at 2.9mln t.

However, it will be very interesting to see how the EU overcomes its quality issue as the season progresses.

Algerian shorts have been switching from French to Romanian or Baltic origins to achieve specification. China has already purchased up to 1mln t of French wheat for this season; where France will find it remains to be seen. Romanian wheat continues to dominate Egyptian interest.

With little French quality wheat likely to be offered, major importers will be assessing prospects, especially given the much-reduced Russian wheat crop and growing expectations of further potential government intervention there. 

Russian farmers had harvested 19.9mln ha of wheat as of 23 August, 1.1mln ha up on 2020, but average yields are estimated at 3.13t/ha, compared with 3.58t/ha. Domestic prices have rallied to a 10-year high for August, raising concerns about food price inflation.

Canadian trade participants are expecting a sharp cut in the 2021 all-wheat production estimate due to be released by StatsCan on Monday.

However, Ukrainian farmers have almost completed the 2021 wheat harvest, threshing 32mln t of wheat from 97.5% of the sown area as of 24 August, above previous estimates, with average yields reported at 4.62t/ha.

The UK harvest continues to progress as a more settled weather pattern allows increased activity. Results to date remain variable, with protein content and bushel weights lower than in 2020. 

Official data shows end-season (2020/21) wheat stocks are projected at a historically low level, despite imports totalling 2.439mln t.

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

We have seen a yet another choppy week on the markets.

Asia veg oil demand is helping soy oil rebound from recent lows. In the US, soybeans were rated down 1%  good/excellent compared to last week and up 1% on the poor/very poor.

In Canada it is now wet, which is delaying progress of the canola harvest. On Wednesday fund traders stepped into the market and bought aggressively, following a bad crop conditions report.

MATIF firmed yesterday and tested recent highs again, which provided an opportunity for some farmers to achieve the numbers they have been looking for.

In the UK, most farmers have progressed well with the rapeseed harvest, which is now almost complete.