David Sheppard, Gleadell’s managing director, comments on the wheat market

The trade waited for the USDA’s initial thoughts on 2015/16, but they came and went without a whimper.

Most numbers were as the trade expected. Global wheat and corn production were projected lower year-on-year while carryout stocks from 2014/15 were increased, leaving available supplies for 2015/16 at record levels.

All the report confirmed was that, given normal weather, supplies remain more than adequate through the 2015/16 season, keeping the bearish sentiment intact.

EU traders are still waiting for confirmation regarding the Russian export situation, as it is perceived that the volume of wheat shipments will substantially increase over the coming weeks and months. French wheat crop conditions are still well above last season at 90% good / very good. EU export pace has reduced in recent weeks, with indications that demand is falling with only six weeks of the 2014/15 campaign left.

UK markets have been provided with a double whammy in the past week. Confirmation that the Conservatives were going to hold an overall majority sent waves of support through the financial markets and sterling soared against both the euro and US dollar. However, this does not bode well for UK grain prices as export values will rise accordingly.

In addition, official export numbers for March showed exports slowing and imports rising, adding more supplies to the already abundant scenario. However, as the season draws to a close, we expect increased debate on where this supposed 3mln t surplus is and when it will come to market.

• USDA reports US corn plantings 75% complete – more good figures expected this week due to favourable weather.
• USDA forecasts reduced 2015 global wheat and corn crops but increased carry-in stocks raise overall availability.    
• USDA forecasts record Chinese 2015 wheat and corn crops and lower imports.
• Market analyst UkrAgroConsult raises Russian 2014/15 grain export forecast to 30.5mln t, up from 29mln t previously.
• Analysis group Strategie Grains raises forecast for EU-28 2015/16 soft wheat crop by 1.2mln t to 142.6mln t (149.3mln t in 2014/15).
• UK wheat exports fell in March to 237,383t, imports seen rising to 128.125t – surplus seen increasing further.
• USDA reports US winter wheat crop ratings up 1% on the week at 44% good /excellent – improved SRW crop rating.
• Crop bureau FranceAgriMer reports French soft wheat crop ratings down 1% on the week at 90% good/very good condition.
• US wheat firms on increased quality concerns due to excessive rains and weaker US dollar – triggers short covering.
• Global market participants are on the alert as El Nino weather phenomenon is declared official. Effect on crop sizes either side of the Pacific unclear as yet.