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

US corn and soybean plantings are now completed (much in line with last season which ended with record yields for both crops). The recent hot weather had led to a significant ‘heat premium’ being built into prices. However, the latest GFS weather model brings cooler and wetter conditions into the US Mid-West earlier than anticipated, which has led to some profit-taking over the past few days.

US spring wheat crop ratings continue to deteriorate, with the current dry conditions across the Northern Plains set to continue. Although the US hard red winter wheat harvest is gathering pace, yields are trending below average with protein levels also lacking, which should keep the quality spring wheat futures market underpinned.

In the EU, the recent heatwave has pushed markets higher. However, as in the US, a cooler forecast for France has seen the market retreat from the recent highs.

Old crop prices in the UK are taking on a much more regional stance, depending on the availability of local supplies. Talk that the recent heat may bring harvest forward, and with known imports due to arrive next week and in early July, has in some areas lowered sellers’ aspirations. However, in the deficit areas prices remain firm with sellers reluctant to ‘chase down the buyer’.

In summary, weather, economics and currency are providing enough uncertainties to loosen farm selling, although the market has gone up quickly, leaving it vulnerable to profit taking.

With spring crops now planted, the trade will continue to track the weather and its potential impact upon crops. However, at current levels with the known fundamentals, it may be a worthwhile marketing strategy for farmers to increase their selling activity.