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

After a topsy-turvy week US wheat prices remain virtually unchanged, while corn values are down $15/t following the liquidation of corn/wheat spreads and talk of a higher US corn area.

Ratings for US spring and summer crops (wheat, corn and soybeans) continue to decline amid drought-like conditions in the western corn belt and northern plains.

Dry conditions are seen affecting much of Canada’s agricultural areas and timely rains are much needed if crops are to reach expected yields.

Ukraine has started its 2021 winter wheat harvest soon after the ministry confirmed spring sowings were complete. However recent heavy rainfall has raised concerns over final quality and quantity of this year’s wheat crop.

By contrast, an estimated 81% of France’s soft wheat crop was in good/excellent condition as of 14 June, unchanged on the week but well above the 56% figure recorded the same time last year..

EU crop monitoring unit MARS reports 2021 cereal yields are set to be ‘firmly above’ average in the bloc this season, and has raised its soft wheat projection to 6.01t/ha. That’s an increase of 0.1t/ha on last month’s figure and well above the five-year average of 5.69t/ha.

This, plus the ongoing prospect of French wheat going to China and competitive prices for German/Baltic supplies, should yield brisk EU wheat demand at the start of the 2021/22 marketing season, while an export levy clouds Russian prospects.

Current favourable weather continues to boost prospects for UK crops. ADM puts wheat production at 15.2-15.5mln t, while stressing that the crop is far from made. As wheat enters the key grain filling stage, weather becomes more crucial to final production.

Despite the likelihood of a slightly larger 2020/21 carry-out and a sizeable 2021 wheat crop, the UK is still expected to be a net importer this coming season, although not to the scale projected a few months ago.

But, with global wheat stocks seen as more than abundant, ADM believes new crop prices are reasonably attractive for farmers, especially given better yield prospects.

Some long-term support could still surface from the global corn market and further Chinese commodity buying, while summer weather in the US and the USDA acreage report due out next Wednesday remain key market-direction signals for all major grain and oilseed commodities.

• For more information on the wheat market with ADM Agriculture’s Jonathan Lane, please go to the ADM Agriculture YouTube channel.