AHDB daily market commentary

[AHDB Cereals and Oilseeds]

Tuesday 6 July

• UK feed wheat futures (Nov-21) fell £3.05/t yesterday to £167.40/t. Paris wheat also fell (€3.75/t on Dec-21), though US markets were closed for the 4th July holiday.
• Rains are due in the US and harvested Black Sea grains are now reaching the market, pressuring prices.
• Yesterday, Egypt’s state buyer (GASC) tendered for an unspecified quantity of wheat due for shipment in September, of which the lowest offer was for Romanian wheat for 60Kt at $237.94/t (free-on-board). Prices for Russian wheat exports are reportedly falling too, as harvest progresses, and yields look close to record.
• The latest USDA attaché report for Chinese feed grains increased 2021/22 maize production 4.0Mt to 272.0Mt, due to increased planted area. 2020/21 imports also increased by 5.0Mt to 20.0Mt, though still below official USDA estimates of 26Mt.

Today's Grain market daily is now published - Will better US weather or Brazilian maize cuts move markets more?
Friday's Grain market daily is available here - Barley in demand in May

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[AHDB Cereals and Oilseeds]

Wednesday 07 July

• UK feed wheat futures (Nov-21) moved a further £2.05/t lower yesterday, closing at £165.35/t. This is the lowest position for the contract since 7 April. The Nov-21 contract has now lost £7.45/t since 1 July.
• Chicago maize futures (Dec-21), the leader of recent grain market movements, moved sharply lower yesterday. The move wrote off last Wednesday’s gains.
• Yesterday’s USDA crop condition report was largely positive for maize, with the percent of the crop rated “good” or “excellent” stable at 64%. There was a marginal decline of 1 percentage point in the rating of soyabeans and winter wheat, down to 59% and 47% “good” or “excellent”, respectively.
• US spring wheat crops continue to suffer. In the week ending 4 July, just 16% of the crop was rated “good” or “excellent”. You can read more on the UK impact of this here.
• The AHDB Planting and Variety survey will be published in tomorrow’s GMD at 2pm.

Today's Grain market daily is now published - Chinese maize supply to weigh on prices?

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[AHDB Cereals and Oilseeds]

Thursday 08 July

• UK wheat futures (Nov-21) closed yesterday at £166.10/t, gaining £0.75/t on Tuesday’s close. The May-22 contract also gained £0.75/t to close at £171.85/t.
• Paris wheat futures (Dec-21) closed yesterday at €201.75/t, gaining €1.75/t. In the EU rain in recent weeks has benefitted crops, but there is some cause for concern about quality as the French wheat harvest begins.
• Chicago maize futures (Dec-21) closed yesterday at $209.05/t, down $3.45/t on Tuesday’s close. Forecast wet weather in the U.S. Midwest will be beneficial to maize crops as they are in the yield-determining pollination stage.

Today's Grain market daily is now published - AHDB Planting Variety Survey confirms wheat area recovery

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[AHDB Cereals and Oilseeds]

Thursday 15 July

• The November-21 UK feed wheat futures contract gained £3.90/t yesterday, to close at £169.90/t. It will be a watch point to see if the contract can hold ground above the key £170.00/t price point. Similarly, the May-22 contract gained £3.65/t yesterday, to close at £175.25/t.
• Stratégie Grains further improved their EU-27 production forecasts for wheat, barley and maize for the 2021/22 season in their latest report. It is estimated EU-27 wheat production will be at 133Mt, up from an estimate of 131.1Mt in June. Though harvests are looking to be late, yields are expected to be good. Soft wheat exports are expected at 31Mt up from 26.9Mt in 2020/21.
• Weather models from the National Oceanic and Atmospheric Administration (NOAA) indicate the potential for a re-emergence of a La Nina weather event over the next few months. If realised, this could aggravate further the severe drought felt in Brazil in recent months.
• Egypt purchased 180Kt of Romanian origin wheat in its international tender yesterday. Prices ranged from $262.19/t (£189.08/t) to $266.88/t (£192.46/t).

GB regional wheat production estimates 2021/22

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[AHDB Cereals and Oilseeds]

Friday 16 July

• Grain markets continued to show strength yesterday, with UK feed wheat futures (Nov-21) closing at £170.90/t. UK markets have shown more strength this morning, up a further £4.40/t at the time of writing, at £175.30/t.
• This morning’s move follows the increase in Paris milling wheat futures (Dec-21). French crop conditions have been hit by the wet weather in the week to 12 July, with 76% of soft wheat rated “good” or “excellent” versus 79% the week before. With wet weather having continued in Europe for much of this week, conditions and harvest progress have likely been impacted further.
• Chicago maize, which has been a key leader of grains, paused yesterday. Net sales of new crop US maize in the week ending 8 July came in below industry expectations at 133Kt. Despite this, outstanding sales of the new crop remain strong with 16.1Mt booked so far.

Prices rally as Russian crop reduces

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[AHDB Cereals and Oilseeds]

Tuesday 20 July

• UK wheat futures (Nov-21) closed yesterday at £178.40/t gaining £1.55/t on Friday’s close. The May-21 contracted closed at £183.45/t gaining £1.20/t on Friday’s close.
• The latest USDA crop conditions report released yesterday rated 65% of US maize good-to-excellent (as of Sunday). Unchanged from last week despite rains across parts of the US Midwest last week.
• Good-to-excellent spring wheat conditions fell 5% week-on-week to be estimated at 11%, as dry weather in northern states continues to impact the crop. Only minimal scattered rains are forecast over the next week in key northern US states.

Bullish news limiting harvest pressure

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[AHDB Cereals and Oilseeds]

Wednesday 21 July

• UK wheat futures (Nov-21) closed yesterday at £180.40/t gaining £2.00/t on the day. The contract has gained £14.40/t from last Tuesday (13 July) owing in part to detrimental hot weather affecting parts of the US. The May-22 contract gained £2.05/t, to close at £185.50/t, yesterday.
• The recent deadly floods in Germany is estimated to have resulted in wheat production losses of between 150Kt – 200Kt, for reference Germany is expected to harvest 22.8 – 23.0Mt in 2021/22. Questions remain for winter wheat quality with, concerns for hagberg and protein levels.
• The Argentinian government has made efforts to limit water usage to alleviate pressure on the Parana River, where water levels are at a 77-year. The Parana River is the route for an estimated 80% of Argentina’s agricultural exports. A continued lack of rainfall at both its source in Brazil and the river in Argentina will continue to hamper exports.

Will Chinese maize support to feature for a consecutive season?

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[AHDB Cereals and Oilseeds]

Friday 23 July

• Global grain prices fell yesterday due to profit taking by speculative traders and technical selling (Refinitiv). UK prices reflected this drop and UK feed wheat futures (Nov-21) lost £4.20/t to close at £174.30/t.
• Paris rapeseed futures (Nov-21) gained €5.50/t to €526.50/t (roughly £450/t), despite a fall in soyabean prices. This is due to continued fears over the impact of hot, dry weather on the Canadian canola (rapeseed) crop.
• This week’s Saskatchewan crop report said that crops ‘remain extremely stressed and continue to advance quickly’. What’s more, any rain received now will not increase yields; it will only help stop further losses. Saskatchewan accounts for 41% of Canadian barley, 45% of wheat and 55% of canola output (2016-2020).

Supply picture still uncertain despite global harvests advancing

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[AHDB Cereals and Oilseeds]

Wednesday 28 July

• UK feed wheat (Nov-21) closed up £0.20/t yesterday to £175.00/t. However, this morning the contract found further support, quoted at £177.00/t at 12pm.
• As the Wheat Quality Council tour gets going this week, spring wheat yields in southern and eastern North Dakota (the US top producing state for spring wheat) are reportedly well below average due to severe drought conditions.
• US soyabeans are also finding support on US crop damage concerns from hot and dry weather, with crops rated ‘good’ to ‘excellent’ falling an extra 2 percentage points to 58% on Monday. These concerns contribute to a tightening picture for global supply and demand.

EU suggests the concern may be quality, not quantity

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[AHDB Cereals and Oilseeds]

Thursday 29 July

• UK wheat futures (Nov-21) closed yesterday at £177.35/t, gaining £2.35/t on Tuesday’s close. May-22 futures closed yesterday at £183.00/t up £2.65/t on Tuesday’s close.
• Support in the domestic markets follows gains in Paris and Chicago wheat markets. Driving this is the recent crop tour in the U.S., which showed that key wheat producing states are showing signs of crop damage due to the ongoing dry weather. Further, in Europe, wet weather is hampering harvest and potentially threatening crop quality.
• SovEcon reduced its forecast for Russian wheat exports for 2021/22 marketing year by 1.3Mt, exports are now forecast at 37.1Mt.

Will barley’s large discount to wheat continue for the 2021/22 marketing year?

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[AHDB Cereals and Oilseeds]

Tuesday 03 August

• Nov-21 UK feed wheat futures gained £3.85/t yesterday amid more negative news about US and Russian wheat crops. The contract closed £186.35/t, its highest price since 12 May. The May-22 contract gained £4.70/t to £192.20/t.
• The condition of US maize crops inched lower again. As at 1 August, 62% was in ‘good’ or ‘excellent’ condition, down from 64% last week and 72% last year (USDA).
• Paris rapeseed futures (Nov-21) rose due to worries about palm oil availability due to labour shortages. The contract gained €75/t from Friday to close yesterday at €527.25/t, equating to £450.75/t.
• Oilseed prices could face pressure today after crude oil prices fell and US soyabean crop condition ratings improved. The latest USDA crop progress report rates 60% of the US crop as ‘good’ or ‘excellent’, up from 58% last week.

UK wheat futures discount to Paris wheat widening

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[AHDB Cereals and Oilseeds]

Thursday 05 August

• UK feed wheat futures (Nov-21) continued their pause yesterday, falling £2.10/t, to £183.50/t. The last two days of falls follows a run of gains which saw the contract up £11.55/t between Monday 26 July and Monday 2 August.
• Markets have gained on global wheat crop pessimism, with dryness impact North America and shrinking crop forecasts in Russia. However, markets need a constant flow of information to keep moving higher.
• Attention will turn to next weeks crop condition reports from the US and Canada, as well as the USDA supply and demand estimates (WASDE) due next Thursday.

Barley usage to remain strong next season

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[AHDB Cereals and Oilseeds]

Friday 06 August

• UK feed wheat (Nov-21) gained £0.15/t yesterday, to close at £183.65/t. The May-22 contract lost £0.15/t to close at £188.85/t and Nov-22 gained £0.50/t to close at £171.00/t.
• There is support from global supply concerns for wheat crops. Crops in Russia, the US and Canada are all under question, and there are fresh concerns from temperature swings in Argentina.
• This was met with higher-than-expected US maize export net sales for 2021/22. Sales totalled 830.2Kt, up 57% from the previous week.
• US weather continues to be considered favourable, with rains arriving, or due, in many states. However, some concern has arisen from the recent drought map extending extreme drought conditions into parts of Iowa (a key maize and soyabean producing state). The trade now waits for the next USDA world agricultural supply and demand estimates on Thursday next week.

H&I usage down last year, but what to consider for 2021/22?

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[AHDB Cereals and Oilseeds]

Tuesday 10 August

• UK feed wheat futures closed £0.50/t lower yesterday, at £186.00/t. The UK market followed the general drift in grain markets globally, as we drift towards the USDA supply and demand estimates (WASDE) and crop production estimates on Thursday.
• US crop conditions maintained to improved over the last week (read more in today’s article). US maize is now rated 64% “good” or “excellent”, up two percentage points on the week. Soyabean conditions were unchanged at 60% rated “good” or “excellent”.
• Rapeseed futures moved lower yesterday. The Indian government has announced plans to reduce the nations reliance on vegetable oil imports, with a $1.5bn investment to grow domestic edible oil output (Refinitiv). India is the worlds largest vegetable oil importer.

Influence wearing thin for US weather on wheat

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[AHDB Cereals and Oilseeds]

Wednesday 11 August

• UK feed wheat futures (Nov-21) closed yesterday at £189.75/t, up £3.75/t from the previous close. Values traded in a £4.50 range throughout the day.
• UK futures followed the lead of both Paris milling wheat futures (Dec-21) and Chicago wheat futures (Dec-21), which gained €5.25/t and $5.24/t, respectively. Chicago wheat futures have since eased back down again this morning.
• Rain and cool temperatures in France have caused slow harvest progress and quality issues, supporting wheat prices.
• Strong Russian cash prices have also moved the market higher.

Delivered rapeseed prices reach historic highs this season

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[AHDB Cereals and Oilseeds]

Tuesday 17 August

• UK feed wheat futures fell back yesterday, following strong gains last week. The Nov-21 contract closed yesterday at £193.00/t, a drop of £2.00/t on the day.
• The Nov-21 contract remained £7.00/t above the same point last week and £41.25/t ahead of the average of the last five November contracts (£151.75/t).
• Early anecdotal reports of French cereal quality suggest that while harvest has been delayed quality has generally been acceptable. One primary concern for quality, given the rain, is Hagberg Falling Number (HFN). FranceAgriMer however, report that HFN is “generally satisfactory”. Protein levels are reportedly high to very high. Specific weight is the main area of concern, described as “irregular”, but generally satisfactory. Soufflet group reported last week that just 35% of samples collected so far reached 76kg/hl.

Is it time to lock in rapeseed support?

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[AHDB Cereals and Oilseeds]

Wednesday 18 August

• UK wheat futures (Nov-21) closed yesterday at £188.75/t, down £4.25/t on Monday’s close. The May-22 contract closed at £194.00/t, down £4.75/t on Monday’s close.
• This fall in the domestic market is due to pressure on Chicago (Dec-21) and Paris (Dec-21) wheat markets. Although there are still supply concerns for wheat, investors have been booking profits after wheat markets rallied last week.
• Paris rapeseed futures (Nov-21) closed yesterday at €574.75/t, gaining €0.75/t on Monday’s close. While the November 22 contract was down €7.00/t closing at €475.00/t.

First insight into Canadian canola crop damage

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[AHDB Cereals and Oilseeds]

Thursday 19 August

• UK feed wheat futures (Nov-21) gained £5.00/t yesterday, closing at £193.75/t. Gains were made on concerns of wheat availability in major exporters, specifically Russia.
• Egypt’s GASC purchased 180Kt of wheat yesterday from Romania and Ukraine. Romanian wheat remains the most competitive origin. The lowest offer was for 60Kt at $294.99/t (FOB) plus $34.43/t for freight. This is $35.68/t higher than the Romanian wheat offer at the previous GASC tender on 2 August.
• The Pro Farmer Midwest tour continues, finding maize yields and soyabean pod counts in Illinois to be above the three-year average and ahead of last year.
• Rains are expected in the Midwest too. This has caused soyabean price falls (Nov-21) for 2 days consecutively, as crop prospects improve. Values also fell in early trading this morning.

Defra’s provisional arable areas, what can we expect from winter barley and OSR production?

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[AHDB Cereals and Oilseeds]

Friday 20 August

• The third AHDB harvest report is now out. Unsettled weather across GB has continued to cause delays to harvest. Winter wheat clearance is the lowest since 2017.
• Nov-21 UK feed wheat futures closed yesterday at £191.00/t, down £2.75/t from the previous days close.
• Chicago Dec-21 soyabean futures tumbled $12.21/t from Wednesday to Thursdays close. This follows favourable weather forecasts in north-western parts of the US Midwest which could boost crop prospects and also improved export demand.

UK barley will need to remain competitive

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[AHDB Cereals and Oilseeds]

Tuesday 24 August

• UK feed wheat futures (Nov-21) rose £0.50/t yesterday, to £193.50/t. The US inspected more wheat for export than the market had expected. This, along with a weaker US dollar helped support global wheat prices.
• Rapeseed prices also rose due to a recovery in crude oil prices. The Nov-21 rapeseed price rose by €00/t, to €561.50/t.
• Nervousness about possible lower demand from changes to US biofuel policy (more in yesterday’s Market Report) capped the gains in both grain and oilseed prices.
• After the UK market closed yesterday, the USDA released its latest crop condition report. The USDA reduced the proportion of the US maize crop rated good / excellent from 62% last week to 60%. The market had expected 61% (Refinitiv poll).

Dry weather risk for 2021/22 South American crops

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