Faced with overwhelming trade data evidence, the USDA has been forced to raise US 🇺🇸corn exports and cut US ending stocks in their latest April crop report. The US & world 🌎 corn market are very tight, and getting tighter. This report confirms the direction of travel. Global stocks of corn are so tight that the prices need to ration demand. The market is responding, with CBOT corn futures ahead again tonight. Wheat prices are also following upwards, as the report argues for more wheat inclusion in global feed rations (a consequence of higher corn prices). This is a bullish report for global old crop grain prices. It confirms our ideas that corn is the key crop to which domestic UK 🇬🇧 wheat price have no alternative but which to follow….
Over the last few days, grain and oilseeds markets have rebounded strongly on the back of increasing new crop production risks. In the US 🇺🇸, conditions are too dry in the North for spring wheat and corn. In Western Europe 🇪🇺, including the UK 🇬🇧, low soil temperature and moisture is starting to worry. And the very recent frost might also have damaged the flowering OSR in France 🇫🇷 and Germany 🇩🇪. And traders will keep a close eye on the rainfalls in Brazil 🇧🇷, crucial for the 2nd corn yields. In a context of low world stocks (to be confirmed in tonight's USDA report - 5 pm), we expect prices to remain extra reactive to any additional risks, providing greater selling opportunities before
Since November winter wheat crops are in overall slightly better shape, with 63% rated good/excellent (57% in Nov), barley has had mixed fortunes, but rapeseed crops haven’t over-wintered all that well, with g/ex ratings falling from 77% in Nov, to just 41% in March. While the data currently supports the argument for a slightly larger wheat yield / production, many farmers report the need for rainfall to maintain crop health. It is yet to be decided if the UK will be a net importer of wheat in 2021/22. The ODA Plantings survey update next week will add to this conversation.
European 🇪🇺spring crop conditions appear relatively benign at present, with adequate soil moisture levels for most. Crop ratings are well above last year’s poor levels, although the recent cold snap may have hurt some rapeseed crops. In the Black Sea region 🇷🇺🇺🇦, winter is over and field assessments will be regularly undertaken in the weeks ahead. In the US🇺🇸, corn seeding is underway into decent moisture levels. However, dryness for the spring wheat crop may become an issue without rains. More to follow over the coming weeks, as the annual weather market steps up a gear.
The global compound feed industry is being forced to look at wheat as an alternative to corn in their rations. Prices of the two commodities are very close across the world, which favours more wheat usage, While this would take some pressure off the tight corn supply & demand, prices of both crops may need to climb higher still, to ration corn demand further. UK 🇬🇧 grain price are inextricably linked to these market developments. The corn market will continue to drive grain prices through 2021. We will be monitoring weather developments in Brazil 🇧🇷, US 🇺🇸 planting progress and Chinese 🇨🇳 demand. Don't miss our 14th April webinar on the current corn situation. Register here, on: https://forms.gle/GXrj5VgjfGKkr4S4A
The much anticipated US Prospective plantings report, released this evening, did not disappoint. World markets were braced for a massive acreage increase by US farmers into soybean and corn. The survey shows that, despite historically high prices, US farmers are not expected to drill wall-to-wall corn/soybeans. Chicago futures (corn/beans) are all limit higher. UK 🇬🇧 wheat is up £4/t for the spot contract and will likely see further strength ahead of the long weekend.
As US and global 🌎 markets turn their attention to spring planting prospects, conditions across the US Midwest region are in good shape. Earlier concerns over a lack of moisture have been allayed in the last fortnight. As the weather map shows, widespread and heavy rains just ahead of the main drilling period argue for a decent start for young plants. Markets had until recently priced-in a weather premium, due to sub-optimal conditions, but this premium is currently being eroded. There is a long way to travel before the crops here are harvested, though.
A ‘mega’-size container ship traversing through the key Suez canal shipping lane has beached, preventing the free-flow of global 🌎 freight traffic. There are 100’s of vessels at either end of the canal awaiting clearance to proceed. Importantly, the route is key for crude oil tankers bringing supplies from the M.East 🇸🇦 to Europe 🇪🇺 and without access, tight European supply chains are being tested. World crude oil prices rose 5% as a consequence, in turn lifting oilseeds prices. Latest reports see only a few day’s disruption.
With very tight supplies and strong demand, the global oilseed markets are all set to remain buoyant. The soya, palm, oilseed rape S&Ds are easy to read: stocks are low, supplies are not improving, demand is expanding. As such, price and crush margins are going up, driven by very supportive vegetable oil markets. Grain markets are another story...Read more
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|t-ice||WHEAT||May '21||196.00s||196.00||s||1.00||196.00||198.00||196.00||86||3320||ICE||04/09/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Jul '21||192.75s||192.75||s||1.00||192.75||192.75||192.75||43||ICE||04/09/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Nov '21||167.50s||167.50||s||1.10||167.50||169.50||167.50||327||7399||ICE||04/09/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Jan '22||169.50s||169.50||s||0.90||169.50||169.50||169.50||ICE||04/09/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Mar '22||170.65s||170.65||s||0.70||170.65||170.65||170.65||ICE||04/09/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||May '22||171.55s||171.55||s||0.50||171.55||171.55||171.55||827||ICE||04/09/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Jul '22||172.55s||172.55||s||0.25||172.55||172.55||172.55||ICE||04/09/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Nov '22||163.00s||163.00||s||0.00||163.00||163.00||162.75||13||412||ICE||04/09/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Jan '23||166.55s||166.55||s||0.00||166.55||166.55||166.55||ICE||04/09/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Mar '23||168.40s||168.40||s||0.00||168.40||168.40||168.40||ICE||04/09/21||16:33:17||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
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