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

Another week where the ups and downs of the market have provided little directional movement.

The spike in prices following last week’s USDA report took the market into an overbought position, which in turn prompted some profit-taking, dragging prices back down from recent highs.

As a result, US markets are trading slightly lower on the week, despite downward revisions of wheat harvest expectations by several key producers.

US spring wheat ratings have been pegged back, as has Argentina’s wheat crop. Russia’s wheat output has also been trimmed, while drought-hit Kazakhstan has cut its 2021 grain crop by 24% on last year to 15.3mln t.

FranceAgriMer reported 72% of the French soft wheat crop had been harvested as of 9 Aug, 11 days behind the average due to delays caused by heavy rain. Grain quality is being affected.

German co-op DVR now puts the country’s wheat crop at 22.4mln t, down from 22.8mln t previously, with yields below expectations following a cold spring and summer heatwave.

The UK harvest continues at a sluggish pace. Activity is slowly moving north and west, although ongoing shortness of supplies and increasing logistical issues means growers in certain areas can still obtain small premiums. However, these have weakened considerably compared with a few weeks ago.

Perhaps offering a pointer to future price direction, Egypt’s state buyer GASC has purchased 180,000t of Romanian wheat for 5-15 October shipment, paying $35/t FOB more than its previous tender.

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

Another mixed week on the market prices, with US stocks and weather dictating the majority of the market direction over the past seven days.

The oilseeds complex seems to have run out of steam following the initial rally after last week’s USDA report.

US weather is forecast to turn cooler with rain for the second half of August, which will help crop conditions. Current crop ratings fell 3% on the week to 57% good/excellent compared with 60% a week ago  and 72% last year.

On Wednesday USDA announced the sales of 131,000t of US soybeans to China, which lent support to prices.

Malaysian palm oil fell back from recent highs yesterday. Palm oil prices fell 2.65% due to the weaker veg-oil complex and a fall in palm oil shipments. Crude oil prices continue to fall due to continued fears over forward demand in China.

Canadian canola values dropped back midweek. The market is digesting ongoing declines in production estimates, which many believe could fall further yet. 

MATIF rapeseed has tried to make further gains, but eventually followed CBOT lower. Concerns over Russian’s sunflower crop may support prices, but after a big gain of circa £30/t in the past week Matif process are now trading just off the highs.

Sterling remains within the €1.1700/1.1800 range, removing any currency effect and leaving UK ex-farm values following US beans and oil markets. Seed was worth £480/t delivered Erith Thursday morning, still up £7-8 on the week, but the market remains volatile.