AHDB daily market commentary

[AHDB Cereals and Oilseeds]

Friday 10 December 2021

• Both May-22 and Nov-22 UK feed wheat futures lost £3.00/t yesterday. The May contract closed at £226.00/t, while Nov-22 closed at £201.50/t.
• Over the past few days, expectations for big wheat crops in Australia and Argentina have weighed on wheat prices. Re-positioning ahead of last night’s USDA report (see below) and better weather for winter wheat crops in the US were also likely factors.
• With the Argentine wheat harvest past the halfway point, the Buenos Aries Grain Exchange upped its crop forecast by 0.7Mt to 21.0Mt (17.0Mt last season). Yields have been better than expected.
• Brazilian forecasting agency Conab increased its forecasts for the country’s maize and soyabean crops. Maize output is now pegged at 117.2Mt (up 0.5Mt), with the soyabean crop at 142.8Mt (up 0.8Mt).

Wheat dipped after USDA raised stocks​

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[AHDB Cereals and Oilseeds]

Tuesday 14 December 2021

• May-22 UK feed wheat futures dipped yesterday, down £0.55/t to £227.25/t. The Nov-22 contract also fell £0.55/t to £201.05/t.
• Paris rapeseed futures (May-22) lost €2.75/t to €662.00/t, approx. £564.00/t. Nov-22 prices fell €8.00/t to €543.00/t, approx. £462.50/t.
• These dips partly followed a fall in Chicago maize and soyabean futures. There was selling by speculative traders and rain is forecast for southern Brazil in the coming days. This area, along with northern Argentina, are big maize and soyabean growing areas but have been drier than normal in recent weeks.
• Trade association Coceral forecasts 2022 rapeseed production in the EU-27 and UK at 20.0Mt, up from 18.5Mt this year, due to larger planted areas. Coceral also projects the wheat crop (exc. Durum) to fall 3.4Mt to 139.8Mt assuming yields return to average in the Balkan states.

Speculative trading risk for grain prices​

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[AHDB Cereals and Oilseeds]

Wednesday 15 December 2021

• UK feed wheat futures (May-22) gained £0.25/t yesterday, to close at £227.50/t. This is despite small falls on the Paris milling wheat (May-22) and Chicago wheat (May-22) contracts. Yesterday saw only small volumes traded and sterling strengthen.
• Demand for wheat continues, with global tenders from Jordan, Turkey, Iran, and Algeria this week.
• Algeria’s state grain agency (OAIC) reportedly purchased 690Kt-700Kt of milling wheat yesterday at around $372.00-$373.00/t (C&F) for panamax vessels, to $376.00/t for handymax vessels. Likely origins are thought to be Germany, the Baltic Sea region, and Black Sea region.
• Chicago soyabeans (May-22) gained $4.96/t yesterday, to close at $467.61/t. Gains were reportedly tracking Chicago soyabean meal prices, which were up $12.90/t to $411.38/t.

Frost tolerance a concern in Black Sea areas

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[AHDB Cereals and Oilseeds]

Thursday 16 December 2021

• UK wheat futures (May-22) closed yesterday at £222.00/t, down £5.50/t on Tuesday’s close. The Nov-22 contract closed at £196.00/t, down £4.00/t on Tuesday’s close.
• UK prices followed movements in both the Chicago and Paris wheat markets. One bearish driver cited is the ongoing harvest of Australia’s bumper wheat crop.
• Further to that, there is news that Russia might alter their planned wheat export quota. This quota is currently set at 9.0Mt and will run from February to June next year. Sources suggest that this quota, for wheat, could be revised to 8.0Mt (Refinitiv, Interfax).

When will soyabeans drive rapeseed prices again?

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[AHDB Cereals and Oilseeds]

Friday 17 December 2021

• UK feed wheat futures (May-22) slipped again yesterday closing at £220.65/t, down £1.35/t from Wednesdays close. Since Monday the contract has lost £6.60/t, although at the time of writing had rebounded a little. New crop (Nov-22) closed yesterday at £195.65/t, down £0.35/t.
• US wheat (May-22) regained some of the recently lost ground yesterday, closing at $284.73/t up $4.78/t. The Dec-22 (new crop) contract also closed yesterday up from the previous day, closing at $284.55/t.
• The US is said to be experiencing dry and unseasonably warm weather in some key bread wheat growing regions. The crop is suffering as a result and may be more susceptible to harsh winter weather in the coming weeks.
• Stratégie Grains has revised their EU-27 soft wheat and maize exports up, to 31.5Mt (+1.1Mt) and 4.5Mt (+0.7Mt) respectively for the current marketing year (2021/22). Looking ahead to harvest 2022, the firm estimate wheat production down year-on-year at 127.6Mt.

Winter cropping continues to regain ground for harvest 2022: Grain market daily

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[AHDB Cereals and Oilseeds]

Tuesday 21 December 2021

• UK feed wheat (May-22) gained £1.05/t to close at £224.00/t yesterday. These gains followed Paris and Chicago wheat futures.
• Global wheat contracts re-adjusted yesterday, following thoughts that Omicron concerns had meant prices have become oversold.
• Chicago soyabean (May-22) futures increased $2.30/t yesterday to close at $477.53/t. Concerns that dryness in South America may impact on production continue for both South American soyabeans and maize crops.
• Sovecon, the Russian agriculture consultancy, have increased their forecast for Russian wheat harvest 2022 to 81.3Mt. This is up from 80.7Mt on good sowing conditions.

UK wheat import pace slows

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[AHDB Cereals and Oilseeds]

Wednesday 22 December 2021

• May-22 UK feed wheat futures gained another £3.50/t yesterday to close at £227.50/t. That brings it back in line with the previous Tuesdays close. The new crop contract (Nov-22) also closed higher yesterday, up £3.40/t to £200.90/t.
• Movements in UK futures follow US and French May-22 contracts, which closed $7.81/t and €4.25/t higher yesterday.
• German rapeseed and wheat areas are estimated up year-on-year, according to Germany’s national statistics agency. The rapeseed area is estimated at 1.08Mha, up 8.7% from last year, on the back of strong prices. Rapeseed is important for edible oil and biodiesel markets in Europe and Germany is one of the biggest rapeseed producers.

Is the weather dampening wheat prospects? Grain market daily

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[AHDB Cereals and Oilseeds]

Thursday 23 December 2021

• May-22 UK feed wheat futures gained £4.50/t yesterday to close at £232.00/t. This is the highest price since 2 December. Meanwhile, May-22 Paris rapeseed futures rose €9.75/t to €687.50/t, approximately £583.50/t.
• Weather worries, especially for South American maize and soyabean crops, have pushed global grain and oilseed prices higher in the last couple of days. Heavy rain in Malaysia could also dent palm oil production this month.
• There was also support for wheat prices from reports that Ukraine is considering export restrictions for milling wheat in 2022 (Refintiv). Ukraine has exported rapidly this season, partly due to the export tax imposed by neighbour Russia, and domestic prices are rising.
• This is the last Grain Market Daily of 2021. We wish you a very happy Christmas and a safe and prosperous 2022. Grain Market Daily will resume on Wednesday 5 January.

An uncertain end to 2021: Grain market daily​

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[AHDB Cereals and Oilseeds]

Wednesday 05 January 2022

• UK feed wheat futures (May-22) closed yesterday at £224.00/t, down £0.50/t from Friday’s close. In the same time, Sterling strengthened (+0.72%) against the Euro counteracting the small rise in Paris futures (May-22).
• Paris milling wheat futures (May-22) gained €0.75/t since Friday, but €4.75/t from Monday, to close yesterday at €277.50/t.
• Support to the European market came from Chicago maize and wheat futures (May-22) gaining $7.28/t and $4.41/t respectively from Monday’s close.
• Dryness concerns continue to aid bullish sentiment with South American weather potentially hampering maize (and soyabean) prospects. Also, dryness in the US is causing concern for new crop wheat as crop ratings slip in key producing states Oklahoma and Kansas.

Good start to the 2021/22 marketing year for UK feed wheat: Grain market daily

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[AHDB Cereals and Oilseeds]

Thursday 06 January 2022

• UK feed wheat futures (May-22) dropped back £3.00/t yesterday, to close at £221.00/t. Whereas, the Nov-22 contract only dropped back £0.75/t to close at £194.25/t.
• A lack of ‘new’ news saw UK feed wheat futures follow Chicago and Paris wheat futures down yesterday. A fall in wheat prices also weighed on Chicago maize (May-22) futures yesterday, falling $2.66/t to $237.30/t.
• Chicago soyabean (May-22) futures continued to climb for the 4th consecutive day yesterday. The contract closed at $515.46/t. Gains were on South American weather concerns, more on this below.
• Soyabeans may also be finding support from the wider vegetable oil complex. Malaysian palm oil futures (May-22) also saw gains yesterday for the 4th consecutive day on supply concerns. Gains over 4 days totalled 7%. However, they have been sliding back this morning, likely on a technical correction.

Analyst Insight: South American weather supporting markets

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[AHDB Cereals and Oilseeds]

Wednesday, 12 January 2022

• UK feed wheat futures (May-22) gained £0.95/t yesterday, to close at £219.95/t. Whereas, the November-22 contract gained £2.60/t yesterday, to close at £194.40/t. This follows global wheat futures in position squaring ahead of today’s USDA world agricultural supply and demand estimates (WASDE).
• Brazil’s Conab reduced their 2021/22 forecasts from last month for Brazilian soyabeans and maize yesterday on drought concerns. The soyabean crop was reduced by 2.3Mt to 140.5Mt, and maize crop reduced by 4.2Mt to 112.9Mt. Both estimates remain ahead of 2020/21 crop sizes.
• EU-27 soft wheat exports are understood to be 15.11Mt, as at 9 Jan according to Eurostat customs surveillance data. This is 1.0Mt more than European Commission official data update last week, as missing French data is retrieved.

Strong global maize prices narrow the discount to wheat

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[AHDB Cereals and Oilseeds]

Thursday, 13 January 2022

• UK feed wheat futures (May-22) dropped £2.95/t yesterday to £217.00/t, to close at its lowest price since October 2021. New-crop (Nov-22) only slipped £0.90/t to close at £193.50/t.
• Chicago soyabeans (May-22) jumped $4.68/t yesterday following the bullish USDA report (read more below) to close at $517.39/t. Using latest estimates, global stocks-to-use for 2021/22 is 25.4%, down from 27.1% in Dec-21 and the lowest since 2015/16.
• AHDB usage data, up to November-end, is now available online. This includes GB animal feed production and UK human and industrial cereal usage.

WASDE washup

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[AHDB Cereals and Oilseeds]

Friday 14 January 2022

• Selling by speculative traders and improved South American weather forecasts pulled both global grain and oilseed prices lower yesterday. May-22 UK feed wheat futures lost £3.95/t to close at £213.05/t, while the Nov-22 contract lost £2.50/t to £191.00/t.
• Rain is forecast for key South American maize and soyabean growing regions this weekend. However, the amounts and location will be critical to if the rain can stabilise production.
• There was also pressure on wheat markets from an improved wheat supply outlook. The International Grains Council (IGC) raised its estimates of 2021/22 wheat output and closing stocks. This follows similar changes by the USDA on Wednesday. However, the IGC cautioned that wheat stocks in major exporting countries are unlikely to see much recovery in 2022/23.

Barley exports slowed in November

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[AHDB Cereals and Oilseeds]

Tuesday 18 January 2022

• UK feed wheat (May-22) futures climbed £1.00/t yesterday, to close at £211.75/t. New crop contract Nov-22 contract gained £1.15/t, to close at £192.20/t. Volumes traded were low yesterday.
• This followed a rise on the Paris milling wheat contract (May-22), but Chicago markets yesterday were closed for a holiday.
• China’s maize imports stood at 28.35Mt in 2021 according to Refinitiv, up 152% from the previous record level in 2020. Imports of wheat totalled 9.77Mt in 2021, up 16.6% from 2020.
• In response to Indonesia’s announcement yesterday to test biofuels with a palm oil-based content of 40% in February, Malaysian palm oil (May-22) futures gained 2%.

Support for rapeseed from tight soyabean global balance

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[AHDB Cereals and Oilseeds]

Wednesday 19 January 2022

• May-22 UK feed wheat futures gained a further £1.75/t yesterday to close at £213.50/t. That is a second consecutive day of gains after dropping almost everyday last week.
• Chicago and Paris wheat futures (May-22) also recorded gains yesterday to close at $282.99/t and €265.75/t, respectively.
• Wheat markets, and subsequently maize markets, have rallied on the back of concerns surrounding Russian and Ukrainian relations which could disrupt global wheat trade. Also, strong US export data offers support.
• Paris rapeseed futures (May-22) dropped €25.00/t yesterday to close at €687.00/t, the lowest price since 21 December 2021. However, a rally in crude oil, a supported palm oil market and strong soyabean demand, could limit losses to rapeseed today.

Today's Grain Market Daily: Feed demand shifts as prices rise

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[AHDB Cereals and Oilseeds]

Thursday 20 January 2022

• Global wheat prices rose again yesterday, as political tensions between Russia and Ukraine continue. Short-covering by speculative traders and technical trading signals also contributed to the rise.
• Old crop (May-22) UK feed wheat futures gained £5.50/t to £219.00/t, while new crop (Nov-22) prices rose £4.10/t to £198.00/t.
• Uncertainty over the extent of the benefit of recent rain in parts of Brazil and Argentina also supported Chicago maize and soyabean prices.
• Paris rapeseed futures benefited from the lift in Chicago soyabean futures and stronger crude oil prices. Old crop (May-22) rapeseed futures gained €13.50/t to €700.50/t, while new crop (Nov-22) prices rose €8.50/t to €588.50/t.

Why Black Sea tensions matter for wheat

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[AHDB Cereals and Oilseeds]

Friday 21 January 2022

• UK feed wheat (May-22) softened yesterday, down £0.15/t to close at £218.85/t. The Nov-22 contract fell by the same amount, ending the day at £197.85/t. Markets looked to be taking a breather, following three days of price rises.
• Chicago soyabeans (May-22) had its biggest jump of the season, up $12.40/t to $527.04/t (read more in today's Grain Market Daily).
• Paris rapeseed (May-22) followed soyabeans trajectory, though to a lesser extent. The contract finished the day at €705.00/t, €4.50/t more than the day earlier.
• Malaysian palm oil futures ended at a record high this week, with lower January output and export limit plans driving the rises. The contract for April delivery has ended the week at 5,323 ringgit ($1,271.92)/t, up 3.9% on the week.

Today's Grain Market Daily: Chicago soyabeans are jumping

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[AHDB Cereals and Oilseeds]

Tuesday 25 January 2022

• Concern over Black Sea tensions again pushed up global wheat prices yesterday. May-22 UK feed wheat futures rose £3.75/t to £222.00/t. The Nov-22 contract rose £2.55/t to £199.55/t, its highest price since 23 December 2021.
• Paris rapeseed futures fell yesterday under pressure from lower crude oil prices and a fall in soyabean prices. The May-22 contract lost €30.25/t to €667.25/t (approx. £560/t), the Nov-22 contract fell €9.75/t to €594.75/t (approx. £499/t).
• Improved weather means the Brazilian soyabean harvest reached 5% complete by 20 January (AgRural). This is up from 0.7% a week earlier. Yields are so far described as ‘satisfactory’ in the top producing state of Mato Grosso, but low yields are being seen further south (Refintiv).
• Wheat crops in Texas have deteriorated since late November. As at 23 January, 71% of the crop was rated ‘poor’ or ‘very poor’, up from 45% on 28 November. A year ago, just 41% of the crop was ‘poor’ or ‘very poor’ (USDA).

Today's Grain Market Daily: Frost risk remains for Black Sea crops

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[AHDB Cereals and Oilseeds]

Wednesday 26 January 2022

• UK feed wheat (May-22) futures climbed £6.00/t yesterday to close at £228.00/t. Though this morning has re-traced some gains. New crop futures (Nov-22) closed at £204.00/t, gaining £4.45/t on Monday’s close.
• Gains were made following US and Paris wheat contracts up, strengthened by rising political tensions in the Black Sea region as well as poor US crop conditions. There is more information on US crop conditions below.
• Recent rains in Argentina in the Northwest have reportedly improved the outlook for maize and soyabeans according to Bolsa de Cereales (Refinitiv). Though the South has received less rain. More rain forecasted in the Northwest and central Argentina in the coming days, but the South looks to remain dry (Refinitiv).

Today's Grain Market Daily: New-crop US wheat conditions down

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[AHDB Cereals and Oilseeds]

Thursday 27 January 2022

• UK wheat futures (May-22) closed yesterday at £221.55/t, down £6.45/t on Tuesday’s close. November-22 closed at £199.50/t, down £4.50/t on Tuesday’s close.
• Domestic prices followed both the Chicago and Paris wheat markets down. The sharp fall were due to profit-taking as there was potential progression towards resolving the Russian-Ukrainian crisis. The US said on Wednesday it will set out a diplomatic path to address Russian demands.
• Chicago soyabeans (May-22) futures gained 2.19% yesterday, setting a new contract high of $531.68/t. The sharp increase came as soy oil futures rallied with energy markets, and concerns about reduced output from South America.
• AHDB’s latest Agri market outlook is now online. Check out the webpage, which has outlooks for all our agricultural sectors.

Today's Grain Market Daily: Limited scope to export wheat as UK S&D remains tight

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