Jonathan Lane, ADM Agriculture’s head of grain trading, comments on the Wheat Market

US prices have firmed as ongoing delays in corn and soybean plantings and a decline in winter wheat crop ratings lead to further bouts of fund short-covering.

Weather conditions globally remain far from ideal for crop development. There are concerns over dry conditions in Australia, Canada and Russia, while wet weather in Eastern Europe and the Ukraine still poses a threat to final quantity and quality.

Russia’s agriculture ministry has cut its forecast for 2019/20 wheat production to 75mln t from 78mln t. This follows crop damage due to cold weather in the Volga Valley. Grain exports are forecast to reach 45mln t, including 36mln t of wheat.

The EU Commission raised its forecast of 2019/20 common wheat production to 143.8mln t from 141.3mln t last month, whilst leaving its projection for common wheat exports to non-EU countries unchanged at 25.5mln t.

UK growers have taken advantage of the £20/t rally in new crop wheat prices from the low set on the 13^th May, increasing their selling activity.

The resignation announcement from Theresa May and the ongoing Brexit saga is keeping sterling in a choppy range. Although unchanged on the week, it has provided some support to ex-farm prices.

Barry Howard, ADM Agriculture’s head of oilseeds, comments on the OSR Market

It has been another volatile week for Chicago soybeans as funds unwind their short positions.

The market is still reacting to the US weather forecasts, which show rain until the first week June before dryer conditions prevail. Areas of the Mississippi have been flooded for the longest period since 1927.

US soybean planting progress looks to be limited in the short term. They are estimated as 29% complete, compared with 19% last week and 74% this time last year.

Canadian canola hit six-week highs in recent days before following other markets down, which enticed some farmer selling. Canada’s export sales volumes seem to be stable although, with China still absent from the market, another outlet is needed.

European rapeseed prices struggled to sustain recent highs, following soybeans lower. But, despite recent rain, concerns remain over the size of next season’s EU rapeseed crop. As mentioned last week, production estimates are still being reduced, to below 18 mln t.

UK rapeseed prices followed the European trend. The UK old crop carry continues to grow and prices are quickly reaching new crop levels.

Sterling is still trading at the lower end of its recent range and remains choppy on the prospect of a second Brexit referendum, rather than fears of a 'no-deal' Brexit on October 31^st.