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

USDA has put out some bigger-than-expected numbers for US maize and soybean yields in its latest supply and demand estimate, but the wheat projections were deemed as neutral.

The US wheat crop was raised slightly, mainly due to an upgrade in spring wheat production, offsetting a reduced outlook for winter wheat.

Talk of larger export availabilities from Russia, Canada and Australia continues to put pressure on the Chicago market, as traders believe US export prices remain too high.

In the UK, the harvest creeps northwards. Growers remain reluctant sellers. Harvested supplies seem to be able to find outlets and, given the expected smaller UK harvest, there remains little sign of harvest pressure.

The lack of availability in the more northern and western regions is underpinning spot prices, although wheat is traveling from the south and east to help meet demand.

In more detail, US prices are down $6-7/t on the week due to competition from other key exporters.

USDA raised global 2020/21 wheat ending stocks in its latest report. US stocks were reduced slightly, mainly due to a forecasted increase in exports.

The report increased US maize stocks as a result of a higher-than-expected hike in yield, up 1.8% to 181.8 bushels/acre. Global ending stocks for 2020/21 were also revised higher.

Strategie Grains has again reduced its estimate of the EU 2020 soft wheat crop, down 2.3 mln t on the month to 128mln t.

Germany’s farm co-operative association expects the 2020 wheat crop to fall 7% year on year to 21.5mln t.

Brazil’s agricultural agency CONAB has raised this season’s corn production forecast to 102.1mln t, up from 100.6mln t in July. It left the recently harvested soybean crop unchanged at a record 120.9mln t.

Egypt continues its international purchasing, buying a further two cargoes of Russian wheat in its latest tender.

The EU has re-introduced an import levy on maize, at €5.48/t, effective from 12 August. The charge also applies to rye and sorghum imports.

Ukraine grain exports stood at 2.96mln t as of 26 July, down 1mln t on the year due to lower maize shipments. The figures include 1.46mln t of wheat, 490,000t maize and 1mln t of barley.

Ukraine’s central and southern regions are suffering from a lack of moisture, creating unfavourable conditions for winter crop sowings

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

China continues to purchase new crop US soybeans, taking the total close to 12mln t with a further 258,000mt traded on Wednesday prior to the USDA report. It seems there is some positional play from the Chinese before this week’s meeting with the US regarding the phase one deal.

Soybean crops conditions improved 1% to 74% good/excellent verses expectations of a 1% decline. These are the best crop ratings since 1994.

US weather will be watched closely. A storm of hurricane force spread across the Midwest on Monday which caused widespread damage to crops and property.

USDA’s August supply and demand report released on Wednesday was viewed by most as potentially bearish. USDA increased US soybean yields from 49.8 bushels/acre to 53.3 bushels/acre, with some estimating yields could be higher come harvest.

US soybean ending stocks for the current marketing season were put at 610 mln bushels, well above the average trade estimate of 526. For 2020/21 the figure is put at 615 mln bushels, slightly under the average trade estimate.

World soybean ending stocks for the current season were estimated at 95.85 mln t, below the average trade estimate of 99.0 (99.7 in July). For 2020/21 USDA went for 95.4 mln t, compared with the average trade estimate of 97.92 (95.08 in July).

Veg oils continue to slide this week with palm oil down another 2.4% in Tuesday’s session.

In Canada weather remains favourable and rapeseed crop estimates remain unchanged at 20 mln t. Margins are still attractive which creates demand, but farmer selling is still slow.

Matif rapeseed traded lower with EU harvest now nearing completion and Imports still readily available to cover any nearby shorts. This week Matif rapeseed broke below its recent €380-385 range to trade at €374. Last night’s pick up in oil helped November futures recover to close above €375.

In Australia weather is also favourable to crop conditions, but with the recent downtrend in the Matif European farmers have become reluctant sellers.

UK prices were again pressured by the firmer pound which has held its levels against the euro, despite confirmation that the UK is in a recession.