Frontrunner

By Frontier AgricultureNews

Frontrunner episodes

August 13, 2021 Frontrunner - 13th August 2021
The United States Department of Agriculture (USDA) published its August World Agricultural Supply and Demands Estimates (WASDE) report on Thursday and presented some bullish surprises. Futures markets reacted with notable gains and US, Paris and London wheat futures all rallied to set new contract highs.

Having taken an overly conservative view of potential crop losses in its July estimates, this time the USDA made some aggressive production cuts. This was particularly the case for Russia where the USDA estimates the wheat crop will be as low as 72.5 million tonnes. This compares with its July estimate of 85 million tonnes. Earlier this week, the Institute for Agricultural Market Studies (IKAR) lowered its production estimate to 77 million tonnes, reflecting poorer than expected yields.

Notable production losses are also seen as a result of the drought that has ravaged Canada; the USDA sees Canadian production falling to 24 million tonnes, compared to its previous July estimate of 31.5 million tonnes. In contrast, both Ukraine and Australia are seen producing larger crops than estimated in July at 33 million tonnes (up 3 million tonnes) and 30 million tonnes (up 1.5 million tonnes) respectively.

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14 min
August 06, 2021 Frontrunner - 6th August 2021
This week, the UK’s oilseed rape harvest has continued making progress further up the country where weather has allowed. As mentioned last week, yield reports seem to be improving as harvest makes its way north. An increase on the widely estimated 3.3t/ha may well be seen before harvest with numbers as high as 5t/ha being reported in the Lincolnshire area.
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12 min
July 30, 2021 Frontrunner - 30th July 2021
Wheat long-holders in many areas can still achieve attractive premiums for old crop wheat as the market scrambles to find stocks to service late-season demand. In Scotland and the North of England particularly, wheat prices that are £30-40/t above harvest levels should encourage most sheds to be emptied as the country enters a new crop year with bare boards and minimal carryover. As wheat harvest started in the south this week, most merchants and consumers will breathe a sigh of relief as we come to the end of one of the smallest UK crop years in recent history.
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10 min
July 23, 2021 Frontrunner - 23rd July 2021
Persistent hot and dry weather continues to damage spring wheat crops in the northern US states, particularly North Dakota and Minnesota. Weekly crop condition ratings slipped to 11% rated ‘good to excellent’, which is just one point above the worst condition rating on record in 1988. The area rated ‘poor to very poor’ increased on the week to 63% from 55% and this data propelled US spring wheat futures to new contract highs - their highest level since November 2012. The weather forecast signals little relief for parched crops and similar problems persist in the Canadian prairies. In its July World Agricultural Supply and Demand Estimates (WASDE) report the United States Department of Agriculture (USDA) cut its Canadian wheat crop estimate by just 500,000 tonnes to a new figure of 31.5 million tonnes, which compares to 35.18 million tonnes produced in the previous season. However, some see Canada producing as little as 25 million tonnes, an estimate which tightens global supply of high-quality bread making wheat.
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14 min
July 16, 2021 Frontrunner - 16th July 2021
US Chicago Board of Trade (CBOT) wheat futures rallied sharply this week, gaining 10% in value from last week’s three-month lows.

Persistent hot and dry weather conditions across US and Canadian spring wheat production areas look set to continue into next week and will prove further damaging for yield potential. Minneapolis spring wheat futures rose above $9/bu which is their highest since December 2012. The fast rise in spring wheat futures prices has significantly extended its premium to CBOT soft red winter (SRW) wheat futures above $2.20. In early April it was little more than 30 cents.

Monday’s US spring wheat progress report saw only 16% of the crop as good to excellent. Although this was unchanged on the week, it also saw the poor to very poor rating increase five points to 55%. On Monday, the United States Department of Agriculture (USDA) cut its US spring crop estimate by 41% on last year and cut total 2021 US wheat production by four million tonnes from its June estimate to 47.52 million tonnes, which is two million tonnes below last year.

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11 min
July 09, 2021 Frontrunner - 9th July 2021
Wheat markets have stepped lower this week again, strongly influenced by the fortunes for US corn. Chicago Board of Trade (CBOT) markets were closed on Monday for Independence Day but most of last week’s sharp price rally was lost on Tuesday following the long US weekend. CBOT corn opened 40 cents down but losses over the week amounted to 10% as US weather changed to cooler and wetter conditions. This was deemed ideal for developing corn plants as they head towards their pollination period.

Speculative funds have been heavy sellers, reducing their long positions and taking corn futures 10% below last Friday’s close through the week. It was not all negative news for corn, with analysts making further cuts to the Brazilian corn crop. Companhia Nacional de Abastecimento (Conab) dropped its estimate by three million tonnes from its previous figure to a new estimate of 93.385 million tonnes. It is anticipated that the United States Department of Agriculture (USDA) will publish a similar number on Monday in its July World Agricultural Supply and Demand Estimate (WASDE) report, down from its previous figure of 98.5 million tonnes.

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12 min
July 02, 2021 Frontrunner - 2nd July 2021
In recent weeks, analysts have been increasing their wheat production estimates for major exporters Russia, Ukraine and the EU-27. This has left a negative tone and seen world prices continually ease during June. This change has been highlighted by London wheat futures which lost £14/t during the month. However, the primary negative price driver has been expectations for a notably higher 2021-22 US corn crop than previously anticipated. Since March, the United States Department of Agriculture (USDA) has estimated the US corn planted area to be just 350,000 acres larger than last year at 91.1 million acres. In contrast, high prices and ideal drilling conditions have led some analysts to estimate an area of more than 96 million acres. This week the USDA updated its estimates and fearing a notable increase in predictions, speculative funds reduced their long positions, adding to price pressure. Average trade wheat area estimates were just below 93.8 million acres, but the USDA surprised the markets with an estimate of 92.7 million acres, which is 1.1 million acres below this average prediction. The market’s reaction was sharp. From the week’s low, Chicago Board of Trade (CBOT) corn prices gained 14% and reported the biggest weekly corn price gain since 2011. Despite the USDA predicting a larger wheat area than previously thought, world wheat prices followed corn higher. London wheat futures regained half their June losses.
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10 min
June 25, 2021 Frontrunner - 25th June 2021
Wheat futures have slipped lower this week. London November 2021 wheat futures closed below £170/t for the first time since mid-April. Grain markets have been pressured by wetter and cooler weather across the primary US corn producing states, which are conditions that are ideal for the pollination period and signal improved yield potential.
Speculative funds have been active sellers, reducing their long corn futures positions, which has also helped to lower wheat prices. The US winter wheat harvest advanced rapidly, up 13 points on the week, and is now around 17% complete, which is adding some harvest price pressure. In contrast, the northern US states have stayed mostly dry and expanding drought is proving increasingly damaging for spring wheat crops.

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15 min
June 18, 2021 Frontrunner - 18th June 2021
Wheat prices have fallen sharply in recent days and London wheat futures have lost more than £10/t from their highs early last week. The fall has been driven by the US agriculture market, particularly by US corn, which has lost over 12% of its value this week.
A host of bearish features have combined to galvanise the aggressive speculative fund sell off. A change in weather prospects is one of the main drivers for lower US corn and wheat markets with cooler and wetter conditions now arriving and expected to benefit spring drilled crops. US markets were also pressured by speculation that the Biden Administration might allow a reduced blending of corn ethanol into fossil fuels as blenders come under severe financial pressure to meet their mandates.

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13 min
June 11, 2021 Frontrunner - 11th June 2021
The week began with markets on an upward trajectory. Weather is hot and dry in Northern USA, Canada and throughout Europe. Any rain we might see is likely to be confined to the Black Sea region. Despite the dryness, the EU wheat crop should achieve a good volume. However, it will not be an early harvest this season, which raises concerns over quality and, subsequently, prices are generally supported.

On Tuesday, Algeria purchased 450,000 tonnes of wheat for August delivery, most likely originating from France, Germany and the Baltics. Despite this tender, inflated freight rates and current spreads make France one of the more expensive origins currently, so some price correction could be seen if French wheat is to compete in the export arena going forward.

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9 min

About Frontrunner

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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…