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Eyeing Canadian/US spring wheat output

Grain markets are continuing to firm up but remain volatile as adverse global weather continues to offer support.

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According to Jonathan Lane, head of grain trading at ADM Agriculture, writing in his latest market report, the focus is now on how low Canadian and US spring wheat production will fall and the resulting impact on the global balance sheet.


In Europe, much-needed drier, warmer weather is expected over the next few weeks. “Hopefully, as harvest activity increases, yield prospects in Russia and the quality of the French crop can be obtained,” said Lane.


“The US winter harvest is now reported as being 73%, complete, although the spring wheat crop continues to decline as drought intensifies across the northern plains. The US corn crop is also suffering in areas experiencing moderate to intense drought.


“Canadian prospects are also declining as drought conditions across most provinces threaten grain and oilseed output.”


Meanwhile, in Russia, latest data shows wheat yields running slightly behind last year. “Whether this trend continues in the more critical black earth region, where harvest is just starting, remains to be seen,” said Lane.


In neighbouring Ukraine, farmers have harvested 5.5 Mt of grain, from 9% of the sown area, with average yields of 4.16 t/ha, according to the agriculture ministry. This included 2.5 Mt of wheat averaging 4.11 t/ha.


According to official sources, favourable weather could push total grain production in the country, to 76 Mt, compared with last year’s 65 Mt, although agency APK Inform has said this month that adverse weather could significantly affect yields.


Kazakhstan plans to restrict or even stop shipment of grain and feedstuffs for six months from 15 August as concerns over crop production increase fears over food security.


Strategie Grains reported that the EU’s wheat harvest will be later than usual, but yields are expected to be good, except for a few central parts of the bloc. Total output was raised to 133 Mt.


Lane continued: “France’s wheat harvest has started. Yields are variable and there are some concerns regarding quality due to recent wet weather.


“Exports across the Channel have been delayed, causing UK spot prices to surge over the past few days due to increasing demand on diminishing domestic supplies.


“UK old crop long-holders should seriously consider offloading supplies. The eventual arrival of vessels may coincide with early harvest activity in parts of the south and east of the UK, meaning the large spot premiums will quickly disappear,” concluded Lane.


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