AHDB daily market commentary

• UK feed wheat futures (Nov-21) closed up £0.50/t yesterday, to £194.00/t. UK wheat looked to take their lead from Paris wheat futures yesterday, supported by tightening wheat supplies.
• Yesterday Chicago soyabeans futures (Nov-21) made their largest daily gain since June, closing up $14.32/t to $489.28/t. Prices found strength from falling US crop conditions, with worries hot and dry weather is negatively impacting on yields.
• Also supporting oilseeds yesterday are rebounds in soyaoil. This comes as US biofuel mandates are questioned.
• The possibility of another La Nina also continues to support row crop prices, threatening to bring further dryness to South America.

• UK wheat futures (Nov-21) closed yesterday at £193.35/t, down £0.65/t from Tuesday’s close. The May-22 contract closed at £198.90/t, down £0.80/t.
• UK futures followed the Chicago (Dec-21) and Paris (Dec-21) wheat futures, as they both felt some pressure. Profits are still being booked after a strong rally, but the fear of tightening supplies curb losses.
• Chicago wheat futures (Dec-21) closed yesterday at $266.55/t, down $18.18/t since the recent peak in prices on 16 August.
• According to data released today, 501.9Kt of home-grown wheat and 241.3Kt of home-grown barley was in merchants, ports and co-ops stocks at the end of June, down 43% and 42% year-on-year, respectively. 403.3Kt of wheat was also estimated to be on-farm at the end of June in England and Wales.

• Nov-21 UK feed wheat futures closed yesterday at £196.10/t, up £2.75/t from Wednesdays close. This follows Paris wheat futures as quality and supply concerns push prices higher (read more below).
• Paris rapeseed (Dec-21) futures slipped €0.50/t from Wednesday to Thursdays close. On the week, the Dec-21 contract gained €12.75/t to close yesterday at €576.75/t.
• This follows a similar trend to US Soyabeans (Nov-21) which closed yesterday at $487.26/t, down $2.39/t from Wednesday. Soyabean futures have slipped further this morning on the back of rain in the Midwest, improving growing conditions.
• The UK wheat harvest still lags behind 2020 (64% complete) and the five-year average (2016-2020 – 57% complete), at 46% complete to 24 August. FranceAgriMer also report a slow French harvest with just 5% of wheat cut in the week ending 23 August due to further rain. This brings France’s total wheat harvest to 96% complete.

• UK wheat futures (Nov-21) closed yesterday at £194.25/t, down £1.50/t on Friday’s close. The May-22 contract closed at £199.25/, down £2.35/t on Friday’s close.
• Chicago wheat, maize and soyabeans all closed lower yesterday. Damage to export facilities on the US Gulf coast from Hurricane Ida has added pressure with the potential for increased US stocks. This is causing concerns for potential disruption to shipments.
• Russian consultancy SovEcon cut its 2021 wheat crop estimate to 75.4Mt, down from 76.2Mt. With the Russian harvest 75% complete, the Siberian crop is the only big unknown now (SovEcon).

• UK wheat futures (Nov-21) closed yesterday at £191.40/t, down £0.35/t on Wednesday’s close. The May-22 contract closed yesterday at £196.90/t, also down £0.35/t on Wednesday’s close.
• Global wheat markets were slightly lifted yesterday, consolidating their position after recent declines and reminders of export demand lending support.
• The uptick was not felt on our domestic market as sterling strengthened against both the Euro and Dollar. Trading closed yesterday at £1 = €1.1647 & £1 = $1.3829.

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• UK feed wheat futures Nov-21, found some support yesterday, closing at £186.00/t. This was a gain of £3.00/t on the day. So far today, the contract has continued to gain.
• UK values have followed strength in the Paris milling wheat futures market. The Dec-21 Paris milling wheat futures contract gained €4.00/t yesterday, closing at €244.00/t. Reduced expectations of the French wheat crop.
• This morning, FranceAgriMer cut its expectation of French soft wheat exports outside the EU to 9.6Mt, down from 10.5Mt in July. Alongside this, the outlook for ending stocks was cut by 0.8Mt, to 2.9Mt.

• UK feed wheat futures (Nov-21) continued to make gains yesterday. The Nov-21 contract closed yesterday at £190.65/t, up £0.70/t on the day. The May-22, and Nov-22 contracts both saw small declines, down £0.20/t and £0.05/t respectively, closing at £196.20/t and £178.00/t.
• Yesterday, Stratégie Grains cut its estimate of EU soft wheat production in 2021/22 by a further 2.4Mt, to 129.1Mt. EU soft wheat exports are pegged at 31.0Mt, 1.7Mt lower than in the organisations last report. Barley production in the EU is seen 700Kt lower, at 52.3Mt.
• Rapeseed plantings in France look set for a large increase. French oilseed growers group FOP, estimate that plantings of rapeseed could be up between 15-20% year-on-year, at 1.12Mha to 1.17Mha.

• UK feed wheat futures (Nov-21) closed lower yesterday, down £0.45/t, at £188.35/t. The contract has struggled to sustain above £190.00/t, having closed above this mark last Thursday. Movements have tracked those in Paris and Chicago markets.
• Russian consultancy SovEcon made a marginal upward revision of 200Kt, to its 2021/22 wheat production estimate. The consultancy now forecasts Russian output at 75.6Mt, the increase follows improved yields in Siberia.
• Strong demand for wheat is seen globally today, with tenders for feed wheat issued by Jordan, Pakistan, and the Philippines. The combined volume of these tenders is 984Kt.

• UK feed wheat futures (Nov-21) closed yesterday at £194.50/t. The contract has gain £6.15/t in two days. This follows wider global grains movements, with both Chicago grains (Dec-21) contracts and Paris milling wheat (Dec-21) moving higher since Tuesday.
• Despite trade friction, China is seen purchasing Australian wheat. Sources suggest China have bought almost 2Mt of Australian wheat due to be harvested later in the year.
• The International Grains Council (IGC) has raised it’s 2021/22 global maize outlook by 7Mt to a record 1,209Mt. The increase comes from the US and Ukraine where the IGC estimate production at 380Mt and 39Mt respectively.

• UK feed wheat futures (Nov-21) closed yesterday at £194.15/t, up marginally from Friday (£0.15/t).
• US harvest is progressing well with 18% of maize and 16% of soyabeans now harvested, both ahead of the 5-year average by 3 percentage points.
• Trade from the Gulf coast begins to recover following disruption from storm Ida. Weekly inspections data shows 11 export vessels loaded from Mississippi River facilities in week ending 23 September, up from 7 the previous week but well below normal levels.

• Our Grain Market Outlook conference is fast approaching. If you want to join us on 12 October, find out more and sign up here.
• UK feed wheat futures (Nov-21) closed yesterday at £195.60/t, gaining £1.45/t on Monday’s close. The May-22 contract closed at £201.60/t, gaining £1.65/t over the same period.
• Chicago maize futures (Dec-21) closed yesterday at $209.65/t, down $2.75/t on Monday’s close.
• Slight pressure in the maize market comes as the US dollar strengthens, US harvest progresses, and crude oil prices slip. Nearby brent crude oil closed yesterday at $79.09/barrel, down 0.55%.

• UK feed wheat futures (Nov-21) closed yesterday at £197.25/t, a gain of £1.65/t. Yesterdays close represented the highest point for the contract, eclipsing the previous high on 26 August.
• UK feed wheat futures have tracked gains in wider grain markets of late. Yesterday saw similar gains in the Paris milling wheat markets, up €2.00/t, at €256.00/t.
• EU soft wheat exports are seen at 6.95Mt, in the week ending 26 September, exports are up just 156Kt on the week. That said, the pace is just 160Kt behind 2019/20, a year when EU soft wheat exports reached 34.8Mt.

• Wheat markets continued their recent sharp gains as cuts to US production and lower than expected US stocks kept the upwards momentum going. UK ICE feed wheat futures for Nov-21 closed at £200.60/t, a gain of £3.35/t on the previous close. Nov-22 futures closed at £185.45/t, which was a £3.15/t increase on the day.
• Global markets remain in a bullish sentiment driven by tight stocks pictures; increases in other global commodity markets and the general ‘squeeze’ on supply chains being felt around the world.
• To temper the good news if you are a seller of grain (or bad news if you are a buyer), fertiliser values in international futures markets keep pushing higher. Dec-21 FOB US Gulf Urea futures priced at $665/ton yesterday, this would be a $209/ton gain through the month of September alone.
• With much of the world focusing on South America to supply grain demand in early 2022, Argentine farmers have started planting maize and have 16.8% of the expected 7.1Mha planted for this season.

• Nov-21 UK feed wheat closed yesterday at £202.50/t, flat from Friday’s close. All key global grains contracts drifted yesterday.
• Yesterday, OPEC+ announced that they would continue to gradually increase oil output. As, a result, brent crude oil (nearby) closed at $81.26/barrel, the highest price since October 2018.
• Rises in crude oil prices have also driven another boost to palm oil. Malaysian palm oil (nearby) has surpassed a lifetime high level this morning, trading as high as RM5,000/t but closing at RM4,975/t.

• UK feed wheat futures closed lower yesterday. The Nov-21 contract closed £2.45/t lower, at £200.05/t. The drop follows six sessions of gains, which have seen the contract move up from £194.15/t on 27 September.
• The move lower in UK prices followed a similar move in Paris milling wheat futures, the Dec-21 contract closing €2.50/t lower, at €262.75/t.
• EU trade data shows soft wheat exports to be ahead of the pace required to meet the EU estimate of 30Mt this season. In the week ending 4 October, EU soft wheat exports totalled 8.07Mt. To reach the EU export forecast for this season, the EU needs to exports c. 560Kt of soft wheat per week.
• Next Tuesday we will be hosting out annual Grain Market Outlook conference. To watch a livestream of our event, sign-up here.

• Nov-21 UK feed wheat futures closed yesterday at £202.50/t, back up to the contract high seen on Friday and Monday.
• Paris rapeseed futures have continued to soar. The Nov-21 contract closed yesterday at €671.25/t, yet another contract high.
  • Support comes from oil markets as most key contracts continued to rise yesterday.
• Indian wheat exports could quadruple compared to 2020 (4.24.4Mt vs 1.1Mt in 2020/21). This comes as global wheat and freight prices rise, making India a competitive origin for Asian markets.
• Next Tuesday, we will be hosting our annual Grain Market Outlook conference. To watch a livestream of our event, sign up here.

• UK feed wheat futures continued their recent climb yesterday. The Nov-21 feed wheat futures contract gained a further £4.00/t yesterday, closing at £208.50/t. The Nov-22 contract gained £3.30/t to close at £191.30/t.
• UK markets tracked European markets higher. Yesterday’s USDA supply and demand estimates pushed wheat ending stocks to the tightest position in more the last five-years (more in the today’s article). Further, The EU market was tightened by FranceAgriMer, who have trimmed French soft wheat ending stocks by the end of the 2021/22 season by 0.5Mt to 2.4Mt.
• Signs of demand destruction for wheat were seen yesterday, with Egypt’s national wheat buyer, GASC, cancelling a tender after offers were received. The tender drew offers from France, Romania, Ukraine and Russia, the tender was cancelled owing to high prices.

• Nov-21 and Nov-22 feed wheat futures slipped back a further £0.50/t yesterday to close at £206.50/t and £191.50/t respectively.
• Paris rapeseed futures (Nov-21) continue to climb, closing yesterday at €689.25/t, up €15.50/t from Monday. This follows strength in oil markets as discussed yesterday by Helen.
• According to Chinese officials, wheat planting was 27% behind the usual pace with just 26% of the expected crop planted by 19 October due to constant rain. Rain is also causing delays to the Chinese maize harvest.

• May-22 UK feed wheat futures rose £1.90/t yesterday to the contract’s highest price yet, £219.50/t. Meanwhile, the Nov-22 contract gained £0.40/t to 191.50/t. Global wheat prices rose due to ongoing strong demand for wheat.
• The notice period started for the UK feed wheat Nov-21 futures contract yesterday. It finishes trading on 23 November. The number of remaining open contracts is dwindling, so the May-22 contract is now a better indicator of pricing.
• The EU’s MARS report shows good progress in planting winter crops across much of Europe. Currently, new crop feed wheat futures are supported by the old crop situation. But, how high they are when we reach harvest will depend on how the 2022/23 crops develop.
• After the UK market closed, the USDA released its first assessment of the condition of the 2022/23 US winter wheat crop. 46% is rated as ‘good’ or ‘excellent’, vs 41% last year, but well behind market expectations of 54% (Refinitiv).

• UK feed wheat futures (May-22) gained again yesterday, increasing £0.65/t to a new contract high of £220.15/t. The Nov-22 contract rose £0.75/t to close at £192.25/t.
• Gains followed Paris milling wheat futures, where the Dec-21 contract rose €2.75/t to close yesterday at €284.75/t. Some gains on the UK contract may have been capped from a strengthening in pound sterling against the euro.
• The wheat market continues to be supported by strong demand and supply. With a further increase in Russian export prices, this tightens supply further.
• Argentine farmers soy sales for 2020/21 lag the previous year, with 32.7Mt sold of 43.1Mt harvested according to the Agriculture Ministry. This is down from 33.9Mt at the same point last year. For 2021/22, a production of 44Mt is expected, of which 2.4Mt has been forward sold.