Dollar decline pushes US wheat up but UK futures fall

While the crop condition of US winter wheat slipped slightly on the week, initial ratings for the spring wheat crop (80% good/excellent) were above last year’s 74%, according to grain trader ADM Agriculture.

Meanwhile, Argentina’s wheat sowings have reached 15% complete amidst talk of dwindling soil moisture. “The crop is still expected to hit a record 21 Mt from 6.8M-ha,” said Jonathan Lane, ADM Agriculture’s head of grain trading, writing in his latest market report.

“However, Ukrainian wheat exports are predicted to fall to about 18 Mt in 2020/21 due to smaller harvest, although no official export limits have been agreed between the [agriculture] ministry and exporters.

“That compares with 20.2 Mt so far this season, part of a record Ukrainian export drive of 54.1 Mt, including 28.4 Mt of maize.”

In Europe, the EU Commission has lowered its forecast for the 2020-21 EU wheat crop (excluding the UK) by 4.3 Mt to 121.5 Mt. It has also reduced exports to 26.5 Mt from 28 Mt previously.

“French wheat crop conditions fell one point in the week ending 25 May to 56% good/excellent. That is the lowest figure for this time of the year since 2011,” said Lane.

“UK [London] new crop futures are down £2/t on the week and well off the highs witnessed late last week, mainly due to the pound strengthening against the US dollar.

“Although rain was forecasted for much of the UK this week, so far some areas have seen very little. It has turned much cooler, but moisture is much needed to stabilise crop conditions.”

In Kazakhstan, the Ministry of Agriculture expects the country to harvest 18 to 18.5 Mt of grain in 2020, with Lane suggesting that grain exports will reach 7 to 7.5 Mt.

“Egypt’s official importer, GASC, has purchased 120,000t of Ukrainian wheat for shipment during 10 to 25 July, as the country tries to boost up its strategic stocks amidst the domestic harvest,” he concluded.