The recent weather has made harvest a struggle for many in the UK.
UK prices were now trading at £20 per tonne below equivalent French values.
And rapeseed reached fresh contract highs.
What to watch
UK prices to continue to be impacted by currency, politics and a reportedly large crop.
London November wheat futures closed on Thursday at £135.50 per tonne, a fall of 1.5% week on week.
Paris December wheat futures settled at E135.50 per tonne, a fall of 1.3% week on week.
Paris rapeseed futures for November settled at E379.25 per tonne, up 0.1% week on week.
Weather causes issues at harvest
No two years are ever the same in the grain industry and this year is proving to be no exception.
The recent weather has meant harvest is still a struggle for many in the UK, especially with regard to moisture levels, which are also leading some to be over-enthusiastic about yields.
The excessive imports of wheat and maize at the end of last season have left most consumers in no hurry to purchase just-harvested commodity and, as such, farmers who have had grain that needs moving have sometimes struggled to find a destination and “acceptable” price.
Ports are busy as UK wheat and barley remain export price competitive, but the real uncertainty still surrounds the UK crop’s quality profile.
The laboratories are flat-out, but it would take a brave person to second guess how wheat currently in the field will perform when finally cut.
UK prices will continue to be impacted by currency and this year will be an education for us all as we deal with global and local macro issues, along with what seems to be a reasonably large crop – if we believe June survey data from Defra, the UK farm ministry.
Cecilia Pryce, Openfield
Aggressive European grain price declines lift export prospects
Sellers remain in charge of European (and UK/US) grain markets.
Last week Paris Matif wheat futures fell another E3 per tonne, marking 10-day losses to about E8 per tonne.
In the UK losses were put at nearly £9 per tonne over the same period, with UK wheat prices now trading at a remarkable £20 per tonne below equivalent French values.
In their latest wheat tender, Egypt received offers from French exporters and on a FOB basis, were attractive.
However, when the C&F freight component was added, prices were uncompetitive compared to Black Sea supplies, who duly won the tender.
The results indicate that Continental wheats are nearly in position to gain vital North African export markets, which at such an early stage in the marketing season is an encouraging change from previous years, when Black Sea wheats have typically dominated sales during the first half of the season.
Russian wheat export tonnages are lagging previous years as farmers hold back their generally good quality supplies from the export channels in anticipation of higher prices ahead.
Rupert Somerscales, ODA
Big crops chasing limited demand
Global wheat prices have continued to erode as large-scale supply competes with limited demand.
The fall in Black Sea and European Union wheat prices continues to provide resistance in the US markets, despite exports from the US running 25% ahead year-on-year.
Northern hemisphere wheat crops are almost made.
Good yields are reported, although quality issues are increasing, especially in parts of the EU where excessive rain fell as crops matured and during harvest.
Focus is now switching to the southern hemisphere.
Australia’s crop is described as being on a knife-edge due to a general shortage of rain, but Argentina is forecast to cut a record crop, and prices have benefited from the recent currency devaluation.
The bearish US corn report issued by USDA earlier this month has resulted in strong selling, driving prices lower.
This is seen as a negative to wheat, as cheap corn competes directly with wheat into food, and animal feed diets.
In summary, wheat continues to drift lower trying to find demand, but harvest yields suggest the reality of an "oversupplied" market will continue to weigh on prices, unless additional domestic or international demand is very quickly turned on.
David Woodland, ADM Agriculture
Rapeseed at fresh contract highs
New week and new high for EU rapeseed futures prices amid a reduced 2019 EU crop, which will require record imports of the oilseed this season and has resulted in rapeseed oil prices at its highest level in Rotterdam since November 2017.
The latter is also attributed to the recent EU decision to increase tariffs on Indonesian palm oil.
As of August 11, the European rapeseed imports were already 13% higher than a year ago at 227,000 tonnes whilst the busiest months of the EU import season remain September and October, accounting for more than 20% of the annual total on a five-year average.
The low soybean pod counts and the delayed maturity of the US crops reported from the ProFarmer Midwest Crop Tour which kicked off at the beginning of the week were also underpinning oilseed prices.
Medium-term though, the ongoing US-China trade tensions, the decimating African swine fever virus spreading in South East Asia curbing soy demand, and the weakness in South American currencies (Argentine peso and Brazilian real) are difficult to ignore and will continue to cap any rally in price.
This is particularly so for soybeans, which currently trade at a $100-per-tonne discount to EU rapeseed.
James Bolesworth, CRM AgriCommodities