In the US, wheat futures are higher week on week, with corn and soybean futures slipping back.
UK farmers are behind with drilling, with some estimating wheat plantings at just 50% on average.
Maize imports continue to arrive in the EU as people take more of it in their diets, with prices remaining competitive.
What to watch
Weather frustration is being felt across Europe with the UK being particularly badly affected. The US is also predicting the lowest area of winter wheat sown in 110 years.
May 2020 London wheat futures closed on Thursday at £151.25 per tonne, a rise of 3.1% week on week.
New crop UK wheat jumps to a near 10-month high
Rains have continued to fall across the country, causing significant delays to plantings and harvest.
In the core producing counties of Cambridgeshire and Lincolnshire, more than 100mm of rain fell in October, or about 70mm more than last year.
According to farmers, UK wheat plantings are estimated to be at least 10-12 days late and at just 50% on average.
Unfortunately, the EC and GFS models are in fair agreement, indicating further showers/unsettled weather for the week ahead with below-normal temperatures which only exacerbate the planting delays for the 2020 harvest.
Combined with a three-month extension to the exit of the UK out of the bloc, old crop London Liffe May 2020 feed wheat reached a near three-month high of £150 per tonne, whilst the new crop November 2020 contract rallied to its highest level since mid-January, close to £160 per tonne.
The trade is getting particularly concerned about new crop with November 2020 feed wheat having gained more than 12% since early September and standing now about £8 per tonne over the May 2020 contract, the highest level for this time of the year between the two contracts since 2014, and compared with £3 under in early August.
Benjamin Bodart, CRM AgriCommodities
Bad weather conditions keep market on its toes
European Union markets are currently focused on ships and weather.
There are planting frustrations being felt in several EU member States with the UK probably still facing the worse weather issues.
The real impact on crops for harvest 2020 will remain a huge uncertainty for a long time.
The window for winter plantings still remains open – yes, many growers would want winter field work in order by now, but the reality is, the drilling window remains open for a while longer if the weather allows field work.
This, along with the uncertainty over this week’s USDA report just keeps the market on its toes.
Egypt’s Gasc purchased 120,000 tonnes of French wheat for December 15-25 which was marginally cheaper than the 55,000 tonnes of Russian wheat they also bought for the same time period.
Meanwhile maize imports continue to arrive in the EU which again proves how price competitive it is and maybe also that the consumers’ taste buds have changed after last season?
Is imported maize now working into diets regardless of domestic supplies or is it really a case that the surplus of EU cereals is logistically price restrictive still?
Cecilia Pryce, Openfield
Wet conditions in Northern Europe threaten 2020 crop production
In terms of market price action, European grain values continue on an upwards trajectory, underpinned by Egypt’s decision to buy the majority of their latest purchase from France.
EU wheat exports are running around 50% greater than last season, but with far more to export this year, prices will need to remain competitive all season.
In the US, wheat futures are also higher week on week, with corn and soybean futures slipping back.
A lack of fresh news on the US-China trade negotiations and growing ideas that corn and soybean yields are stabilising is checking any advance in these markets.
We will find out more about this on Friday, when the USDA releases its latest WASDE crop report.
Until then, we anticipate range-bound trading conditions.
A new survey showed US farmers were expected to sow the lowest area to winter wheat in 110 years, continuing a trend that has been in place for the last few years.
Closer to home, northern Europe remains very wet, especially in France and the Benelux countries.
As with the UK, winter cereal plantings are being delayed, with possible consequences for 2020 EU production.
Eastern Europe, Ukraine and Russia are forecast to have more warm weather that is expected to aid the young plant’s growth.
Rupert Somerscales, ODA