Frontier Agriculture
Member
World Markets
US wheat futures continued their gains yesterday. The dry weather seems to be making the funds nervous, with continued short covering being seen through the first half of this week. This was heightened by the USDA release of much deteriorated crop ratings. The key winter wheat producing state of Kansas was reported at 44% poor to very poor versus 20% last month which is the highest poor rating ever recorded for the state. The good to excellent rating was down from 37% to only 14%. Other states also saw concerning ratings; for example Oklahoma at 4% good to excellent versus 15% last month and Nebraska at 48% versus a previous 64%.
Australian wheat has rallied to an eight-week high and Argentina is still experiencing dry weather. This is a concern for corn yields and is limiting late corn plantings in the north of the country.
Matif wheat futures closed higher yesterday despite a stronger euro – it is reported that physical prices are also driving higher in France due to logistical issues caused by high water levels and a general reluctance of farmers selling at current values. Russian wheat continues to firm despite lower crude oil. This does not seem to have brought about a lower rouble as would normally be expected.
UK Wheat
London wheat closed higher yesterday gaining £0.70/t but this morning it is struggling to hold the gains and has started lower. The global wheat rally has given UK wheat a boost to start the week but old crop values have run out of steam and are weaker again as the domestic supply and demand picture remains heavy, with little to no exports.
More buying interest was seen for new crop where consumers have little cover and are therefore more open to the risk of weather issues driving prices up. Farmers are reluctant to sell this early and are either waiting to see if this weather rally keeps going, or hoping for higher key round numbers to make sales.
Oilseed Rape
Matif lost its gains from the day before, closing at €344 on May.
Brazil is expecting heavy rains in the next two weeks. The main area under threat amounts to 40% of the total soybean area in the country, hampering harvest. In contrast, Argentina remains hot and dry.
These bullish factors will be stemmed by high stocks in the EU. Having seen the market fall more than £30 in three months, any rallies are likely to be tempered by increased farm selling. Overnight markets are slightly weaker.
US wheat futures continued their gains yesterday. The dry weather seems to be making the funds nervous, with continued short covering being seen through the first half of this week. This was heightened by the USDA release of much deteriorated crop ratings. The key winter wheat producing state of Kansas was reported at 44% poor to very poor versus 20% last month which is the highest poor rating ever recorded for the state. The good to excellent rating was down from 37% to only 14%. Other states also saw concerning ratings; for example Oklahoma at 4% good to excellent versus 15% last month and Nebraska at 48% versus a previous 64%.
Australian wheat has rallied to an eight-week high and Argentina is still experiencing dry weather. This is a concern for corn yields and is limiting late corn plantings in the north of the country.
Matif wheat futures closed higher yesterday despite a stronger euro – it is reported that physical prices are also driving higher in France due to logistical issues caused by high water levels and a general reluctance of farmers selling at current values. Russian wheat continues to firm despite lower crude oil. This does not seem to have brought about a lower rouble as would normally be expected.
UK Wheat
London wheat closed higher yesterday gaining £0.70/t but this morning it is struggling to hold the gains and has started lower. The global wheat rally has given UK wheat a boost to start the week but old crop values have run out of steam and are weaker again as the domestic supply and demand picture remains heavy, with little to no exports.
More buying interest was seen for new crop where consumers have little cover and are therefore more open to the risk of weather issues driving prices up. Farmers are reluctant to sell this early and are either waiting to see if this weather rally keeps going, or hoping for higher key round numbers to make sales.
Oilseed Rape
Matif lost its gains from the day before, closing at €344 on May.
Brazil is expecting heavy rains in the next two weeks. The main area under threat amounts to 40% of the total soybean area in the country, hampering harvest. In contrast, Argentina remains hot and dry.
These bullish factors will be stemmed by high stocks in the EU. Having seen the market fall more than £30 in three months, any rallies are likely to be tempered by increased farm selling. Overnight markets are slightly weaker.