Farming News - Wheat and Oilseed Rape Market Report

Wheat and Oilseed Rape Market Report

WHEAT

All wheat markets are stuck in a narrow range as northern hemisphere farmers are more concerned with sowing than crop marketing says Jonathan Lane, ADM Agriculture’s head of grain trading.

This has created some good spot-marketing opportunities for farmers in some regions, although the fundamentals of more supply than demand remain largely unchanged.

In the UK, all ports are almost fully committed for September and October as shippers have put business on the books for the period up to the supposed Brexit day of 31 October.

Almost no export business is currently possible beyond that date, due to tariff concerns, and it appears there will be little, if any, clarity regarding trading rules much before the EU summit of 17-19 October.

If ‘normal’ export business is possible from November onwards, the UK has every chance of exporting its surplus during the remaining eight months of this marketing season.

The alternative, whereby UK exports to the EU would attract a €12 import tariff, would leave the UK having to export well over 1mln t, either at a reduced price into the EU or by seeking other export outlets further afield. The latter is possible, but probably at a discount to ‘normal’ EU business.

Until the political landscape becomes clearer, the UK wheat market will watch and wait, along with most other sectors in UK industry.

OSR

There has been little change on US soybeans this week. Reports of fresh Chinese purchases buoyed prices early on and took the total for the month to 1.3mln t.

Buenos Aires Grain Exchange predicts that Argentina’s 2019/20 soybean crop will drop to 51mln t, forecasting that planting decisions will be influenced by concerns over the economy surrounding the upcoming election.

Ongoing rains continue to delay the Canadian canola harvest, with Manitoba 58% complete (40% last week) and Saskatchewan 15/20% complete (6% last week).

Ukrainian imports are keeping EU crushers supplied nearby, as shippers push to export seed ahead of the 1 January VAT changes.

South Australia received some much-needed rain. However, many forecasters have reduced their production estimates. Oilworld expects the Australian crop to fall to 2.25mln t (2.18mln t last year, a nine-year low).

EU prices are consolidating after their recent rally, as Black Sea imports solve the tight supply situation nearby.

UK prices have also moved sideways this week, with all eyes on sterling, which will be the more important driver of prices in the short term.