September 24th

Market Report

Global ag markets continued to find support. US futures remained bullish with European futures also higher, not clear who is leading who, but the majority of the gains have come from market rumours of a 1.6Mmt per month export quota in Russia (creativity continues). No official confirmation of this but important to note that the quota mechanism has been in place for several years and can be activated at very short notice. Australian weather forecast is changeable but crops in the east look like they could get decent rain. Particularly important in the north as grains enter their filling stage amidst low/absent moisture, still no trade concerns on harvest expectations. The Philippines bought 2x56kt Dec-Jan Aussie feed wheat in the low $350s and Pakistan is said to have bought 575kt of wheat in an international tender that close this week. TCP (Pakistan’s national grain board) was believed to have purchased all the wheat at $383.50 c&f after several trading houses agreed to match the lowest price offered in the Monday tender. Chicago Dec-21 was up 12 cents and Kansas Dec-21 was up 13 cents at the time of writing.

Matif wheat continued to push higher, Dec-21 breaking through the €250/t barrier. Rumours of new French sales to China but nothing concrete. Silos in Rouen remain full and without a single wheat vessel in port, they have halted wheat intake. China does have 9.2Mmt of TRQ’s to take this year, so potentially an offer was made that they couldn’t refuse. Matif Dec-21 settled up €2.50 at €252/t and May-22 settled up €0.75 at €243.25/t. London followed Paris higher, Nov-21 settling up £2.50 at £194.50/t and May-22 settling up £2.60 at £200.00/t. Matif rapeseed continues to be hot, Nov-21 hitting a trading high of €617/t and settling up €8.00 on yesterday at €615/t.

The final 2020/2021 UK cereals S&D was released by the AHDB today. Key headline figure being the UK imported what at 2.43Mmt, 331kt higher than the May forecasts and up 130% from 19/20. With the poor harvest last year, this was no surprise. Barley availability increased in 20/21 to 8.12Mmt and imports up 26% to 88kt. Total domestic consumption, up by 18% year-on-year to 7.29Mmt. 21/2 wheat production is expected to recover, with expectations for total wheat crop in the region of 14.5Mmt. Stocks remain low entering this season. Quality remains a watchpoint, currently just 48% of domestic milling wheat samples are reaching 76kg/hl specific weight. Protein premiums are set to remain high in the UK.