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

US markets have been driven lower by an improved weather outlook across the key growing areas of the Mid-West and Northern Plains. EU and UK futures markets have followed their lead. 

CBOT wheat for Sep 21 is down 56.5cents/bushel week on week, while Nov 21 ICE London wheat is down £6.60/t and Sep 21 Matif wheat has fallen €9.25/t.

Europe, Northern France, Eastern Germany and Poland continue to see significant rainfall, which may hamper progress for the coming harvest. However, yield expectations remain positive, with the EU remaining on course for a potential record wheat crop.

Initial reports from France suggest adequate quality is likely in the early harvested crop. However, intermittent rain is slowing progress and causing quality concerns, although it is too early to tell if this the start of a wider trend.

The weather outlook for the UK looks to be improving in the 15-day forecast, with a steadily decreasing amount of rain, whilst temperatures steadily climb as crops progress through the key grain filling phase.

Turning to the Black Sea region, recent rains have been favourable for the coming crop, although there have been instances of torrential downpours in Ukraine. Overall though, with a drier outlook in the 15-day forecast, the weather continues to support an outlook of large cereal crops across this region.

In summary, weather continues to rule the roost, with all eyes turning to Monday’s USDA supply and demand update for the global picture.

Wheat crops look healthy away from the US and Canada, where corn remains in a delicate position, with continued potential for spill-over support into the wheat markets.

However, in the short term the outlook for big EU/Black Sea wheat crops could be the catalyst for some further downward pressure on prices through harvest.

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

CBOT soybeans closed sharply lower after a long weekend, with July soybeans trading over 90 cents/bushel down by close of play, with meal and oil markets following.

The weather in the US has started to look more favourable, with rain forecast for some key areas for the rest of this week, but perhaps less than some had expected.

As a result there was a big profit-taking session with funds heading to the sideline for the time being, the length being cut significantly in the past few months.

Rumours that China may take more US soybeans for 2021/22 did lend some support to the market, but no trades have been reported yet.

In Brazil, a sharp correction in currency meant the country had the upper hand on export prices which also pressured US beans. Shipments out of Brazil are now slowing and Argentina is still experiencing logistical issues with low water levels. 

After a five-day upward trend, Malaysian palm prices eventually closed lower after reports of higher stocks and increased production.

Energy markets also reversed trends. Crude oil traded at new six-year highs before closing lower on reports that OPEC and producers failed to agree on plans to increase supply in the face of rising global demand. Talks are expected to resume in a few months.

After trading limits up on several occasions last week, Canadian canola closed limits down yesterday. The weekend weather called for cooler temperatures and rain across parts of Saskatchewan, Manitoba and the major growing regions of Alberta, which producers hope will continue throughout July. Temperatures are expected to creep higher next week.

Matif rapeseed prices fell sharply in the last few sessions, having traded €20/t off the season high, touching €500 again in yesterday’s session. Whist the EU harvest is delayed, prices are likely to follow the wider oilseeds complex in the short-term.