EU wheat has reached a fresh two-month high on the back of new tenders from major importers, deteriorating conditions in North America and a weak euro.
And global oilseed values have firmed on the back of adverse weather.
London May 2020 wheat futures closed on Thursday at £144.55 a tonne, a rise of 0.7% week on week.
Paris December 2019 wheat futures closed at E177.00 a tonne, a gain of 0.4% week on week.
Paris November 2019 rapeseed futures settled at E459.50 a tonne, a gain of 0.1% week on week.
EU wheat continues higher to reach a fresh two-month high
In the wake of a new round of tenders from major grain importing countries, deteriorating harvest conditions in North America and a weak euro, December Euronext wheat is set to post a fifth consecutive week of gains, its best performance since the summer of 2018.
The renewed optimism over EU wheat exports was confirmed by FranceAgriMer, which raised its 2019-20 French soft wheat export forecast to non-EU countries to 11.7m tonnes from 11.0m tonnes last month.
If realised, it would be a steep 14% increase on last year but due to its second largest crop on record of nearly 40m tonnes produced this year, the French wheat stocks would still jump more than 30% from the 2018-19 season.
The much-needed strong exports would imply the EU prices would be capped at least in the short-term in order to remain competitive against the Black Sea.
But on Tuesday Egypt’s Gasc purchased only Russian (180,000 tonnes) and Ukrainian (115,000 tonnes) origins with the French too expensive when freight cost was considered.
Winter grain plantings are now well underway in Europe and the Black Sea, where soil moisture has greatly improved in the last two weeks except in Spain.
Benjamin Bodart, CRM AgriCommodities
Global oilseed values firm due to adverse weather
US soybeans have firmed, supported by sharp gains in soymeal amid concerns over adverse weather conditions delaying maturity and harvest of this year’s crop.
South American meal has also made gains on the back of the Chicago market, although beans have not seen the same volatility.
Concerns remain over dry weather, although weather maps do suggest rainfall into southern Brazil and Argentina.
Canada’s canola harvest remains well behind normal at only 37% complete. Much of the growing area is experiencing snow and sub-zero temperatures.
Paris Matif rapeseed prices continue to strengthen and are close to contract highs as concerns mount over EU as well as Canada’s crops.
Asian markets continue to extend recent gains, due to firmer Chicago markets and weakness in the Yuan. In addition, India’s monsoon started later this year but remains significantly stronger than normal, causing flooding, and continues to show a two-to three-week shift from the normal seasonal pattern.
UK farm prices continued to be supported by these firmer global markets, as well as a weaker sterling, mainly linked to the prospects of a no-deal Brexit as the October 31 deadline approaches.
David Woodland, ADM Agriculture