ADM's Jonathan Lane comments on the wheat market 

The US markets continue to be concerned about the domestic weather situation and the state of their spring crops. A 3% drop in the weekly spring wheat crop number and another reduction in the forecast output for Argentina all helped to underpin the market.

The volatile geopolitical situation in the Black Sea also encouraged funds to start buying the market again.

There remains a lot of uncertainty around the Ukraine export corridor and we continue to question how realistic it is to consider that the country will be able to see any return to normal export volumes any time soon.

The missile attack on Odessa 10 days ago, followed by the shocking death of the founder of one Ukraine’s biggest grain exporters in a further missile attack last weekend, only adds to this uncertainty.

There is no doubt that Ukraine exports have the potential to ease the tight situation in the grain S&Ds. However, we are now becoming more concerned about the impact of the hot, dry conditions to the developing European maize crop.

There are also problems for developing maize and soybean crops in the US. The hotter and drier forecast for the northwest Midwest is likely to be the most important issue on the supply side this week.

The next four weeks are still critical for maize production in both the US and Europe and the market will continue to focus on this. If we do see further downside to maize output, especially in the EU, we could see an increase in wheat consumption at a time when the wheat balance sheet cannot afford it.

China has been buying French wheat, along with Pakistan and North Africa – all this keeps the pressure on the S&D. However, what if China cuts its demand? It could be a lower import year for China. The domestic Chinese maize crop is reported in good order so might this curtail the country’s import requirements?

Closer to home, the UK wheat harvest is generally making good progress. Anecdotal estimates suggest the crop is nationally 50-60% complete now, with some in the Eastern regions finished whilst some in the North are only just getting started.

Yield reports still suggest a “good average” crop. The only area to watch at this stage is low proteins, which are very variable even within the same field, but on average seem to be 0.5-0.7 points down on last season.

ADM's Will Ringrose comments on the OSR market

CBOT soybeans traded sharply lower this week following Friday’s sell-off.

Market sentiment remains focused on weather. Showers across the east of the US will help save yields, and although the west remains warm and dry, there is still a chance of showers in the next few weeks.

Soybean crop ratings actually improved 1% to 60% good/excellent, which now matches last season’s levels. USDA’s August report is due next week, but private yield estimates are being reduced by up to 1.5 bushels/acre, circa 3% of the typical yield.

USDA has reported a sale of 132,000t of US soybeans to an unknown destination, but nothing new to China.

In South America, Brazil’s July soybean exports came in at 7.5 mln t versus 8.6 mln t last year, but very little is happening in Argentina.

The US visit to Taiwan has caused friction between the US and China, which forces the latter back to buying South American soybeans, even at a premium.

Crude oil prices have touched $90/barrel again following reports from the US government reducing its fossil fuel demand. Malaysian palm prices and soy oil prices came under pressure following the fall in energy markets.

Canadian rapeseed prices rallied last week, but were pressured by the weaker complex this week. The

Canadian Prairies received rain over the weekend, but Alberta and Saskatchewan remained largely dry. Crop ratings in Alberta were reported at 70% good/excellent last week, with yields predicted to be higher than last year.

Matif rapeseed closed higher on the week last week, very nearly touch €700/t again on Friday, but prices were pressured this week by the drop in oil values. The EU rapeseed harvest is nearing completion, with bigger yields than expected.