As expected milling premiums are raising fast in the UK, as well as in the Continent. They are now trading above £30/t. This was ODA's initial target to start fixing some volume. Nervertheless, we would remain patient, at this stage. Indeed, when comparing to the 2008 situation when world wheat supplies were also very tight, we can foresee more potential on the very short term. So we advise our clients to target £40 to fix the premiums. For any question please contact your ODA consultant.
Latest official Canadian data, released yesterday, triggered a strong market reaction. Canadian canola production is seen at its lowest level since 2010 at only 12Mt, vs 20Mt just 2 months ago. Same for wheat, with a reduction of more than 12Mt yoy. MATIF 🇪🇺 rapeseed markets are back to their highest level of the season, with the €600 now looming. MATIF 🇪🇺 wheat and LIFFE 🇬🇧 also reacted positively with a 4% rebound in the last 2 trading days. These figures sent a strong reminder that markets are going to remain very tight this season and that any price drop is very unlikely on the short-term.
In the true tradition of the USDA, they made only conservative changes to this month’s supply & demand estimates. Yes, they lifted anticipated harvested area and yields for US corn and reduced soy area, but lifted soy yields. However, ‘the market’ had priced-in a more aggressive stance. Fool on the market (although the market is always right in the end). While USDA is defensive in nature with it's stats updates, we cannot ignore that in subsequent USDA reports these numbers (acreage/yields) may likely incrementally grow. Overall, we consider this report as a neutral-to-mildly-bullish factor for grains in the short-term, but bend towards a slightly more positive slant for oilseeds prices. For wheat, this report should be considered neutral.
US officials accidentally released their updated plantings acreage data today, which was scheduled for release after tomorrow’s WASDE report. The updated area estimates see corn, soybeans and wheat areas all higher than previously calculated, suggesting slightly higher overall production levels for each crop. The market had been expecting a more aggressive revision higher to the numbers and so Chicago futures are only slightly weaker in early trading. More to come in Thursday's ODA Weekly.
Queensland farmers in Australia have begun their wheat harvest, with generally good prospects on the cards. ABARES expects a national crop of 32.6Mt, which would be the second largest on record. However, some are struggling with less than ideal weather conditions, mouse plagues and, frost damage across Western Australia. With quality wheats in short supply this year, the world needs a decent Aussie crop quality. If quality here is downgraded, then milling premiums should remain firm, worldwide.🌎.
According to FranceAgriMer, only 39% of the French wheat crop has achieved a test weight above the minimum 76kg/hl requirement for the export market. Given the poor harvest in US 🇺🇸, Canada 🇨🇦 and Kazakhstan🇰🇿 and the relatively inelastic demand profile, the world is facing a shortage of quality wheats; suggesting premiums are likely to remain firm. Conversely, the feed complex should be amply supplied, with large feed wheat supplies and record corn crops expected for China 🇨🇳 , Ukraine 🇺🇦 and Europe 🇪🇺. As such, it could soon be appropriate to sell additional stocks of the feed base price, while storing any wheats/malting barley that are ‘in-spec’, for marketing later in the season.
Prices opened on the upside again this Monday. Markets remain very nervous as Algeria, Egypt and Pakistan are tendering for large wheat volumes for October deliveries. StatCan will also communicate on the latest Canadian 🇨🇦 wheat and canola production forecast, with a high probability for significantly lower supplies again. In Europe 🇪🇺, harvest is coming to an end with very mix quality results. In the UK 🇬🇧, harvest is still ongoing with significant delays due to wet conditions. We expect prices to remain supportive and will soon consider selling opportunities.
Wheat prices for the month are surging to the highest in at least a decade, contrary to the typical decline during this period, as the new harvest flows in. This is the result of farmers holding their grain back from the market. The current floating export tax was meant to help stifle inflation, yet the annual rate is now 6.5%; the highest since 2016. Russian exports have thus been surprisingly slow so far and one can question how the government will react to current inflation rates. To be followed...
Inevitably, the rise in fertilizer prices will significantly increase farmers’ production costs. Soaring gas prices had forced the closure of two large UK fertilizer plants, sparking warnings of a looming shortage of ammonium nitrate. In recent days, following UK Government intervention, one of these plants will re-open, initially for a limited period. Feedback from growers suggests they are reviewing the rate of product they will apply. Could this affect both yields and acreage?Read more
|t-ice||WHEAT||Nov '21||194.00||194.00||-0.50||194.50||195.00||194.00||43||3001||ICE||09/24/21||09:08:49||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Jan '22||197.75y||197.75||y||ICE||09/23/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Mar '22||198.00y||198.00||y||58||ICE||09/23/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||May '22||198.00||198.00||-2.00||198.00||198.00||198.00||25||5046||ICE||09/24/21||09:46:55||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Jul '22||191.80y||191.80||y||ICE||09/23/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Nov '22||178.00y||178.00||y||1899||ICE||09/23/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Jan '23||177.25y||177.25||y||ICE||09/23/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Mar '23||175.50y||175.50||y||ICE||09/23/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||May '23||174.20y||174.20||y||ICE||09/23/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||WHEAT||Nov '23||172.25y||172.25||y||19||ICE||09/23/21||12:00:00||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
In an ever changing world, farmers need a better understanding of market volatility to optimise returns and manage their price risks.
ODA captures and analyses global as well as local market information. Work with ODA to improve your grain sales performance and limit your risks.
Join us today, we can save you time and inform your decisions. Become part of the ODA community of farmers and improve your grain marketing.
A membership delivering stimulating grain marketing news, analysis and advice, both Daily and Weekly.
An interactive membership embracing regular meetings and advice hotline,
helping you identify and manage your risks and set your sales strategies.
An individual business support delivering bespoke analysis, advice and strategy, embracing futures and options alongside physical sales.Learn more
Invest in yourself: ODA Grain Marketing and Price Risk Management Training Course.Learn more
ODA’s team is based in the UK. However, we provide our services to farmers all across Europe and the Black Sea. This large community of farmers enable us to be precisely informed of market changes. This information network is key to provide our clients with the most accurate market information, analysis and advice.