Frontrunner

By Frontier AgricultureNews

Frontrunner episodes

October 22, 2021 Frontrunner - 22nd October 2021
China is the largest wheat producing country and the United States Department of Agriculture (USDA) estimates the country’s total production this season will reach 136.9 million tonnes. However, Chinese government officials said this week that persistent heavy rain impacting the main wheat producing areas across the country has left planting at only 26% complete so far. This is 27 points below the normal pace. Nevertheless, the State Council of the People’s Republic of China said authorities would work to ensure a bumper harvest next summer. Annual wheat consumption this season is expected to be up to 149 million tonnes which highlights the need for successful harvests. Wheat stocks at the end of this season are expected to fall three million tonnes on the year to a total of 141 million tonnes. This equates to just over half the world total, despite ten million tonnes of it being imported.
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11 min
October 15, 2021 Frontrunner - 15th October 2021
The United States Department of Agriculture (USDA) updated markets with the release of its October World Agricultural Supply and Demand Estimates (WASDE) report this week, presenting bullish data that further underpins the strong prevailing prices. Traders expected to see cuts for Canadian wheat output in line with updates from local analysts. Prolonged spells of heat and dryness have been significantly damaging to the Canadian crop and the USDA now sees the crop total down to 21 million tonnes. This is down two million tonnes on last month and 14 million tonnes down on last year. The US wheat production estimate was lowered by 1.4 million tonnes in line with yield adjustments published on 30th September.
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14 min
October 08, 2021 Frontrunner - 8th October 2021
Wheat markets continued to rise this week, supported by strong export trade and uncertainty over Russian wheat export capability. Paris wheat futures have set new contract highs, gaining over 10% in value since the 20th September. So far this season, from 1st July to 4th October, Brussel’s trade data showed the EU had shipped just over eight million tonnes of wheat. This was up by one million tonnes on the week and unofficial vessel counts suggests this is still significantly understated. In the same period last year, just 5.5 million tonnes had been shipped - albeit from a smaller surplus. Analyst group Strategie Grains estimates the EU will have 31 million tonnes available to export this season, which would leave end of season stocks at minimum levels. Therefore, the current pace is not sustainable and the rising prices need to choke off demand. Romania is the EU’s leading wheat exporter, having now shipped 2.9 million tonnes from its record 11.4 million-tonne crop. At this time last season, had shipped less than 800,000 tonnes.
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14 min
October 01, 2021 Frontrunner - 1st October 2021
Paris and London wheat futures rallied to new contract highs this week, the jump in prices triggered by bullish wheat stocks and production data from the United States Department of Agriculture (USDA). US wheat stocks estimates for the 1st September 2021 have been set at 1.78 billion bushels - 70 million bushels below average trade estimates and the lowest since 2007. The USDA also cut its 2021 US wheat production estimate by 50 million bushels from its previous estimate, down to a new total of 1.646 billion bushels. This is the equivalent of 44.79 million tonnes and, if realised, will be the smallest US wheat crop for 19 years.
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11 min
September 24, 2021 Frontrunner - 24th September 2021
London wheat futures prices gained 3.5% from their low on Monday and came within £4/t of the contract high which was achieved in the middle of August. Following higher world market prices, there seemed no clear catalyst for the sharp price rise, but the latest export data from the EU and US was supportive.
Last week, analyst group Stratégie Grains cut its EU wheat export availability estimate by 1.7 million tonnes down to a new estimate of 31 million tonnes. This is as a result of a lower EU wheat production estimate; Stratégie Grains has reduced this figure by 2.4 million tonnes to a new estimate of 129.1 million tonnes. The latest EU export data shows that over 6.5 million tonnes has now been shipped this season, which is two million tonnes ahead of this time last season.

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14 min
September 17, 2021 Frontrunner - 17th September 2021
Late last Friday the United States Department of Agriculture (USDA) published its September World Agricultural Supply and Demand Estimates (WASDE) report; much in line with traders’ expectations it produced neutral to bearish data. World wheat production is seen rising 3.7 million tonnes up to 780 million tonnes, with Australia up 1.5 million tonnes to 31.5 million tonnes and India up 1.52 million tonnes to 109.52 million tonnes. These increases in production estimates are offset by a one million tonne reduction in the Canadian estimate, which is now 23 million tonnes and a reduction in the Argentinian estimate of 500,000 tonnes to a new total of 20 million tonnes. A notable change was that world consumption last season was down four million tonnes, which increases the carry over to this season by the same amount; carry over stocks now sit at 292.46 million tonnes. 2021/22 year end stocks were increased by four million tonnes to 283.22 million tonnes in the August report, but stocks are still seen falling by nine million tonnes on the year. Almost half of global stock - 141 million tonnes - is in China.
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12 min
September 10, 2021 Frontrunner - 10th September 2021
FranceAgriMer updated its French wheat crop data this week with changes that highlighted the poor quality of its crop. Domestic and export milling specifications demand that grain specific weight meets at least 76kgs but only 30% of the crop is estimated to have reached that standard. Such poor French wheat crop quality is unusual; last season over 98% of France’s crop met the minimum 76kgs standard. The Hagberg falling number (HFN) is also an issue, with only 67% meeting the minimum 220 specification.
With up to 70% of French wheat only at feed standard, traditional UK feed wheat export homes will be extremely competitive. This likelihood has contributed to the additional negativity seen in UK wheat futures this week.

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13 min
September 03, 2021 Frontrunner - 3rd September 2021
Earlier this week Statistics Canada (StatsCan) updated its country’s wheat crop estimate, now seeing the crop falling to 22.95 million tonnes. This compares to 35.18 million tonnes last year and, if realised, will be Canada’s smallest crop for 14 years. Persistent excessive heat and dryness for much of the growing season has slashed yield potential for Canada; one of the world’s major wheat exporters.
In its August World Agricultural Supply and Demand Estimates (WASDE) report, the United States Department of Agriculture (USDA) cut its Canadian wheat estimate to 24 million tonnes from 31.5 million tonnes in July. Last season, Canada exported 27.5 million tonnes of wheat and ranked third in wheat volumes shipped, behind Russia and the EU and just ahead of the US. This season’s crop losses will have a major impact on world wheat trade flows and has been one of the primary bullish price drivers for wheat markets. US spring wheat futures are 60% up on the year as a result of tightening quality wheat supplies.

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11 min
August 27, 2021 Frontrunner - 27th August 2021
In contrast to UK feed wheat futures, the Paris futures market has a milling standard specification. Under normal circumstances traders may elect to deliver physical wheat against their futures sales at harvest or buy futures as a hedge against milling wheat export sales they make. However, the adverse French weather and delayed harvesting has seen lower than average specific weights, particularly in northern France, and has left traders unable to source wheat of a sufficient standard to meet the specification required for export (78kgs) or the specification required for futures wheat (76kgs).
This has forced traders with short futures positions to buy back their contracts rather than deliver physical wheat. Last week, this resulted in the nearby September position hitting a €30/t premium to the next December position and saw prices rise to their highest level since 2013.

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13 min
August 20, 2021 Frontrunner - 20th August 2021
In its August World Agricultural Supply and Demand Estimates report, the United States Department of Agriculture surprised markets last week with larger-than-expected production cuts for some of the world's major wheat and corn producers. After the report was released, strong wheat futures surged a further 5% to multi-year highs. However, fresh selling and speculators banking profits gathered pace throughout this week and wiped out the short-lived spike in prices.
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11 min

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Frontrunner is the weekly grain marketing update from Frontier Agriculture. Covering wheat, barley, oilseed rape, pulses, seeds and fertiliser, we make sure growers can keep up to date with the latest…