Gleadell managing director David Sheppard comments on the wheat market

The US Chicago market has seen continued liquidation by fund longholders, trading down almost $15/t on the week.

Spread trading (selling Chicago and buying Minneapolis) has kept the quality wheat market firm, supported by ongoing dryness concerns and deteriorating crop ratings.  

EU markets are also weaker, trading down €7/t on the week.  The French wheat harvest continues to move northwards, with 30% harvested as of 10 July.

Harvests have also commenced in the Black Sea region after a significant rain delay. Yields are reported higher in Russia, but lower in the Ukraine.

Estimates for Russia’s 2017 grain crop have been raised, with analysts now seeing the 2017 wheat crop matching, or even exceeding, last season’s record. However, the strength of the ruble continues to limit farmer selling, pushing up export prices at a time when shippers are executing large volumes of sales.

EU weather maps keep rain across much of Germany, Poland and the Baltic states, creating uncertainty over final yields and quality.

UK prices are trading almost £5/t down on the week, following the other exchanges. Oilseed rape and barley harvest has commenced, and there is the odd report of early wheat being cut, although the rain may curtail activity over the next couple of days.

The trade is waiting to see what it is dealt with quality wise from this year’s harvest.

In summary, uncertainty remains over production of the higher quality wheat in the US, Canada and Australia, while rains may yet affect quality within the EU.