Frontier Agriculture
Member
World markets
Chicago wheat futures have continued to climb through the week to hit a 6 week high yesterday. The main drivers are a weaker US dollar and winter weather bringing out some fund short covering. Ongoing dryness and low temperatures coupled with a lack of snow cover in the Plains is keeping a floor under wheat values. There are no official national US crop ratings until spring but individual states access crops through the winter and there have been some sharp cuts to ratings in the Plains. Kansas is at 44% good to excellent against 54% last year to date and Oklahoma is at 25% versus 77% last year. In the past, final yields have tended to be more often affected by poor spring weather than winter cold, but with next week’s forecast showing some moderation of the cold and still insufficient snow, there has been enough to keep support in the market despite ample global stock levels.
Australia is wet again with around 15% of the harvest estimated to still be in the field. Harvest in Argentina is estimated to be 95% complete with production at 14.2mmt so far of the 15mmt that was projected. Better protein levels have emerged from some southern regions but this has been at the expense of lower yield. The Algeria tender was filled with one vessel of Argentine wheat with the rest spread across European origins, including France which must still have some quality wheat to offer. Russia is still on holiday but the rouble has hit an 18 month high this week.
UK market
Decent gains were made for London wheat yesterday, with Jan 17 closing £1.40/t higher at £141.30/t. Stronger US markets, weaker sterling versus the euro and demand for feed wheat all helped to support. Values were holding steady this morning.
OSR market
The market is on edge over current weather risks. Central Brazil is very wet but the long term outlook is dry, while Northern Argentina and Paraguay are experiencing extreme heat which is affecting crop emergence. Closer to home, a lack of snow cover is still a concern as the extreme cold is set to move in.
Chicago wheat futures have continued to climb through the week to hit a 6 week high yesterday. The main drivers are a weaker US dollar and winter weather bringing out some fund short covering. Ongoing dryness and low temperatures coupled with a lack of snow cover in the Plains is keeping a floor under wheat values. There are no official national US crop ratings until spring but individual states access crops through the winter and there have been some sharp cuts to ratings in the Plains. Kansas is at 44% good to excellent against 54% last year to date and Oklahoma is at 25% versus 77% last year. In the past, final yields have tended to be more often affected by poor spring weather than winter cold, but with next week’s forecast showing some moderation of the cold and still insufficient snow, there has been enough to keep support in the market despite ample global stock levels.
Australia is wet again with around 15% of the harvest estimated to still be in the field. Harvest in Argentina is estimated to be 95% complete with production at 14.2mmt so far of the 15mmt that was projected. Better protein levels have emerged from some southern regions but this has been at the expense of lower yield. The Algeria tender was filled with one vessel of Argentine wheat with the rest spread across European origins, including France which must still have some quality wheat to offer. Russia is still on holiday but the rouble has hit an 18 month high this week.
UK market
Decent gains were made for London wheat yesterday, with Jan 17 closing £1.40/t higher at £141.30/t. Stronger US markets, weaker sterling versus the euro and demand for feed wheat all helped to support. Values were holding steady this morning.
OSR market
The market is on edge over current weather risks. Central Brazil is very wet but the long term outlook is dry, while Northern Argentina and Paraguay are experiencing extreme heat which is affecting crop emergence. Closer to home, a lack of snow cover is still a concern as the extreme cold is set to move in.