Frontier Agriculture
Member
World markets
Chicago wheat made small gains yesterday helped by a weak US dollar which is now at 13 month lows. Forecasts for the US Plains are slightly cooler but still dry and it looks as though this is set to continue into August. Canada likewise remains dry and hot and there is talk of the crop size dropping to 24mmt. The US spring wheat tour is now underway and has dropped yield by 23% on last year. As well as the yield drop there is talk of the harvested area falling after increased talk of abandonment; the area could be as low as 300 million bushels versus the 65-85 million bushels that the USDA forecast. Altogether the North American spring wheat crop could be as much as 7mmt lower than the July USDA report estimated.
Australia has a much more favourable forecast with good rain expected across most of the key wheat growing regions. The rain is yet to fall but if it materialises it will help to replenish soil moisture. Australian wheat futures have fallen for 11 consecutive days in light of lower US markets and the better Australian forecast.
Matif wheat closed slightly lower with the euro at 31 month highs; it has gained 13% this year. Heavy rain continues across Northern Europe which has slowed harvest or brought it to a halt in some places. As some of the wheat is ripe and ready to cut, this is a flag for potential quality issues in premium wheat, particularly German milling wheat. Ukrainian government data continues to indicate increasing yields, up to 3.7t/ha from 3.5 last week, which would give a crop size of 23.2mmt.
UK market
London wheat ended slightly higher yesterday, up £0.75/t with Nov ‘17 at £145.75/t.
OSR market
There was a strong move on MATIF futures last night as rumours that the potential flow of Argentine SME (soy biodiesel) to Europe could be blocked in anti dumping measures.
Various analysts are commenting on the fact that previous years with soybean conditions at or even slightly below the most recent rating have managed to pull out of the season with very respectable yields.
August’s weather is more important than July ratings. Lesser volume in current rains, disparity in models over next week’s rains and an increase in temperatures at the end of next week allowed November beans to rise yesterday.
There is no prospect of rains in southern Canada. Trade chatter thinks the canola crop has dropped from 21.0mmt to 18.9mmt, and yield estimates have dropped by 9%, supporting canola and EU rapeseed.
Funds are net buyers on the whole but remain short overall of -25,000 contracts.
Chicago wheat made small gains yesterday helped by a weak US dollar which is now at 13 month lows. Forecasts for the US Plains are slightly cooler but still dry and it looks as though this is set to continue into August. Canada likewise remains dry and hot and there is talk of the crop size dropping to 24mmt. The US spring wheat tour is now underway and has dropped yield by 23% on last year. As well as the yield drop there is talk of the harvested area falling after increased talk of abandonment; the area could be as low as 300 million bushels versus the 65-85 million bushels that the USDA forecast. Altogether the North American spring wheat crop could be as much as 7mmt lower than the July USDA report estimated.
Australia has a much more favourable forecast with good rain expected across most of the key wheat growing regions. The rain is yet to fall but if it materialises it will help to replenish soil moisture. Australian wheat futures have fallen for 11 consecutive days in light of lower US markets and the better Australian forecast.
Matif wheat closed slightly lower with the euro at 31 month highs; it has gained 13% this year. Heavy rain continues across Northern Europe which has slowed harvest or brought it to a halt in some places. As some of the wheat is ripe and ready to cut, this is a flag for potential quality issues in premium wheat, particularly German milling wheat. Ukrainian government data continues to indicate increasing yields, up to 3.7t/ha from 3.5 last week, which would give a crop size of 23.2mmt.
UK market
London wheat ended slightly higher yesterday, up £0.75/t with Nov ‘17 at £145.75/t.
OSR market
There was a strong move on MATIF futures last night as rumours that the potential flow of Argentine SME (soy biodiesel) to Europe could be blocked in anti dumping measures.
Various analysts are commenting on the fact that previous years with soybean conditions at or even slightly below the most recent rating have managed to pull out of the season with very respectable yields.
August’s weather is more important than July ratings. Lesser volume in current rains, disparity in models over next week’s rains and an increase in temperatures at the end of next week allowed November beans to rise yesterday.
There is no prospect of rains in southern Canada. Trade chatter thinks the canola crop has dropped from 21.0mmt to 18.9mmt, and yield estimates have dropped by 9%, supporting canola and EU rapeseed.
Funds are net buyers on the whole but remain short overall of -25,000 contracts.