Frontrunner

World wheat markets stalled this week with a lack of any fresh bullish features to drive them higher again. US Chicago Board of Trade (CBOT) wheat futures drifted as their winter wheat crop rating made modest improvements following recent rains. 46% of the crop is rated ‘good’ to ‘excellent’ and is up one point on the week. This is still well behind this time last year when 52% of the crop received this rating. 96% of the planned area is planted. Export sales were lower than expected at 192,000 tonnes. Market expectations were for 250,000-500,000 tonnes. This created a lacklustre tone for the market. However, the tight UK wheat supply situation bucked the trend, with London wheat futures setting new contract highs, driven higher by a spell of animal feed compounders taking cover for their forward positions. UK millers, however, remain mostly absent from the market and the prices they offer are heavily discounted to imported supplies. It seems likely this will continue to be the case until the Brexit outcome is established. Meanwhile, ships carrying imported supplies continue to berth at ports around the country.

World wheat markets rallied this week following the publication of the November World Agricultural Supply and Demand Estimates (WASDE) report from the United States Department of Agriculture (USDA) on Tuesday afternoon. There were few changes to the world wheat estimates from last month’s report.Russian production increased by half a million tonnes to 83.5 million tonnes, the Argentinian estimate was cut by one million tonnes to 18 million tonnes and, surprisingly, the estimate did not change at all for Australia, remaining at 28.5 million tonnes, despite estimates from private analysts being as high as 32 million tonnes...

World wheat markets have made impressive gains in price since harvest, highlighted by US Chicago Board of Trade (CBOT) wheat futures which, by the end of last week, had gained over 25% in value. This is impressive as the United States Department of Agriculture (USDA) estimates a record world wheat crop of 733 million tonnes - up nine million tonnes on last year. Furthermore, USDA estimates see stocks rising by 22 million tonnes on the year to 321 million tonnes. Price gains have been generated by both strong international demand and a record-breaking export pace from Black Sea regions. Prolonged dry weather and dry soils in the US and Russia have added to the bullish sentiment in recent weeks, raising concerns for newly planted winter wheat crops.