The United States Department of Agriculture (USDA) surprised markets at the end of March 2020 when it published its US quarterly stocks and acreage report. It estimated that US farmers would significantly expand their corn planted area. The estimate predicted the planted corn area would be 7.3 million acres greater than last year, when prolonged rainfall kept farmers out of the fields.

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This week, the report is read by Group Commercial Strategy Director, Andrew Flux.

Wheat markets continued to fall this week, continuing the trend that coincided with the beginning of June. Improving production prospects for US wheat and corn crops are the main cause for this negativity as Chicago Board of Trade (CBOT) wheat futures fell to within a cent of contract lows set early last September. US CBOT corn futures slipped almost 6% lower during the week.

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This week, the report is read by farm trader, Ron Burnside.

Improving US harvest prospects saw Chicago Board of Trade (CBOT) wheat futures come under increasing pressure this week, losing almost 4% of their value and falling to levels not seen since early September last year. The US wheat harvest is advancing rapidly, with 15% completed according to the most recent crop progress report from the United States Department of Agriculture (USDA), which was published on Monday evening. This figure compares to 7% at this time last year...

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The report is read this week by farm trader, Luke Cox.

Beneficial rain across most of Europe, as well as improving wheat and corn production prospects in the US, weighed on wheat markets early this week. Expectations for a bumper US corn crop in the 2020/21 season grew higher as US farmers advanced their planting to 97% completion. This is ahead of the five-year average of 94% and would suggest that drilling the increased 7.3 million acres projected by the United States Department of Agriculture (USDA) is highly likely...

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The report is read this week by Commercial Manager, Richard Johnston.

Rain arriving in the UK, northern Europe and Black Sea countries has been viewed as beneficial for the drought-stricken wheat crops in these regions, triggering a wave of selling on wheat futures markets earlier this week.

UK prices suffered particularly, losing as much as 40% of the gains they made during May. Values were not helped by the 1% gain of sterling against the euro. However, there was a notable turnaround on Thursday, led by wheat futures from the US Chicago Board of Trade (CBOT), which rallied to a six-week high... 

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This week's report is read by Barley Trader, Westly Garner.

​Cooler, wetter weather in the UK has brought some welcome relief to crops which, as a result, has brought out a few sellers. However, the UK will still need to import substantial quantities of rapeseed into the UK next season.

For 2019, rapeseed markets were mainly supply driven but, since the Covid-19 crisis, we've seen the collapse in demand for mineral oils and rapeseed oil as a result of the lockdowns imposed on industries that would ordinarily need these products. Typically, in the EU, 60% of the demand for rapeseed oil goes into biofuels, with the rest into the food service industry.

Damaging heat and prolonged dry weather coupled with a fall in the value of sterling versus the euro have driven wheat prices higher again this week. Since the beginning of May, London 2020 wheat futures have gained almost £15/t. This is a particularly impressive performance when compared to French wheat futures, which, over the same period, have increased by little more than €3. Unfortunately, not all farmers will benefit from this. The prolonged wet drilling conditions throughout the autumn and winter period prevented planting in vast areas of the country and will result in the smallest UK wheat crop since the 1970s.

You can also listen to Frontrunner - press play to hear the latest report on SoundCloud.

Read this week by Farm Trader, Luke Cox.

World wheat markets had a poor start to the week as traders digested the bearish United States Department of Agriculture (USDA) World Supply and Demand report published last Tuesday. The report signalled ample grain supplies for the coming season and US wheat futures fell to lows not seen since last September. However, prolonged dry weather is adversely affecting the wheat production prospects for some of the primary producers across the Northern Hemisphere and leading officials and analysts to lower their crop estimates. This triggered a wave of buying mid-week and wheat futures rallied sharply.

You can also listen to Frontrunner - press play to hear the latest report on SoundCloud.

This week, the United States Department of Agriculture (USDA) published its World Supply and Demand Estimates for May, which included its first look at the 2020/21 season. An increase in supply exceeding demand is anticipated, which will lead to increased year-end stocks for both wheat and corn. 

Corn production in the US - the world's largest producer - is predicted to jump significantly. By the end of last week, US farmers had drilled over two-thirds of the planned corn area. The area planted is expected to increase by over seven million acres on last year and yields should increase by over 6%.

Following a period of beneficial rain for much of the UK, northern Europe and countries in the Black Sea region, world wheat markets continued to fall earlier this week. London wheat futures lost all gains made during March and April as wheat crop production worries reduced. Improved supply prospects weighed on prices as well as freshly published estimates for reduced demand due to the impact of coronavirus. The latest EU balance sheet from Brussels cut approximately two million tonnes each from both feed and non-feed demand.

Prolonged dryness has been adversely affecting wheat crops in the UK, northern Europe and the Black Sea region. This has helped support world wheat prices in recent weeks. This week, however, saw a change to weather patterns as low pressure systems sweeping in from the west brought much needed rain and relief to stressed winter and spring wheat fields. Confidence that notable yield losses may have been avoided triggered a wave of selling on futures markets. Buyers stood aside and prices dropped to eight-week lows. It remains to be seen how beneficial this rain has been.

​World consumption of oils is forecast to decrease by up to 500,000 tonnes compared to that seen in 2019, due to less biodiesel and food demand.

Wheat markets rallied sharply earlier this week, recovering much of the previous week's losses. Attention turned away from loss of demand due to the impact of Covid-19 to problems with supply, especially in the ethanol sector.

The Ministry of Agriculture of the Russian Federation stated that grain exports would cease once the seven-million-tonne quota they set for the last quarter of the season was reached. It is thought that 3.5 million tonnes of that has already been shipped. Over one million tonnes is being loaded at Russian ports each week, meaning the quota will be surpassed early May.

The Ukraine is also close to meeting its wheat export quota of 20.2 million tonnes, having now shipped 18.5 million tonnes. It is also reported to be considering limiting corn exports to 29.3 million tonnes while the United States Department of Agriculture (USDA) has targeted 32 million tonnes.

Prolonged dry weather in parts of Europe, Russia and Ukraine has resulted in dry soils that are well below average. This has been a strong supporting factor for wheat markets in recent weeks. However, rain arriving in the western side of Europe, as well as Russia and eastern Ukraine, has eased concerns for crop development in those regions. Meanwhile, analysts have been assessing the impact of coronavirus on wheat demand in the milling, animal feed and ethanol sectors and have adjusted their balance sheets accordingly. Last Thursday afternoon, the United States Department of Agriculture (USDA) cut both world wheat and corn use by approximately five million tonnes each. This raised year-end stocks for each commodity by the same value. European analyst Stratégie Grains published its EU balance sheet this week, cutting two million tonnes from last month's estimate of EU wheat use this season and almost three million tonnes for the 2020/21 season.

The UK wheat market has been less volatile than it was last month, making small gains and recovering some of last week's losses. French wheat futures rallied €6 to highs not seen since August 2018. This has been encouraged by the fast EU export pace, which reached almost 25 million tonnes – 67% up on last year and closing in on the season's target of 31 million tonnes. France had its biggest March soft wheat export programme to countries outside of the EU for ten years, despite the logistical challenges brought by the coronavirus. UK wheat prices were capped by firmer sterling and the weight of the old crop surplus that is unlikely to be shipped and will need to carry into next season. New crop prices are supported by the continuing dry spell and increasing temperatures, not just in the UK but across western Europe and extending into eastern Germany and Poland. Crops will become increasingly stressed without rain.

We're working hard to ensure we comply with all Government guidance and continue to deliver good service to our customers. This week we published three updates on our website to provide information related to Covid-19 for customers and suppliers, including updates on social distancing and customer service, additional information on payments, invoicing and administration, and information for third party hauliers. 

The impact of coronavirus continues to be the primary driver for financial and commodity markets. World wheat prices saw significant volatility this week, driven by exaggerated moves in foreign exchange rates and high nearby consumer demand. The Bank of England cut UK interests rates to a record low of just 0.1% and, with the British government introducing other financially supportive measures for the UK economy, sterling fell by 6.5% versus the euro. As a result, London wheat futures rallied to new contract highs for November 2020 and, from the lowest to the highest, achieved a spread in prices of £12/t. The euro also fell versus the US dollar, adding value to European wheat prices. Demand for bread products increased as panic buying cleared supermarket shelves, brought millers back to the market, and added weight to the increase in old crop wheat prices.

The impact of coronavirus on global economies has been the overwhelming factor driving wheat prices this week. The widespread panic-selling seen in stocks and shares and crude oil spilled into all commodities, pushing world wheat prices down. 

US wheat futures fell to lows not seen since last September and their losses since mid-January rose to 15%. However, the impact of this on UK wheat futures was reduced as sterling lost ground to the euro following the Bank of England base rate cut of 0.5%.

Despite the increasing spread of coronavirus and concerns surrounding its potential impact on demand, world wheat markets have managed to tread water this week with overall minimal change. International trade does not appear to have been affected yet, with importing countries such as Tunisia, Korea and Thailand continuing to make wheat purchases.

​Although Friday morning saw price volatility, US wheat futures were trading within one cent of last week's closing prices. Concerns may be greater for supply rather than demand. Furthermore, a Chinese government working group stated that farmers must not let grain output decline this year despite coronavirus ensuring food security.