Headlines:

  • UK turns net wheat importer, as ethanol plant demand surges
    The UK is returning to being a net wheat importer this season for only the fourth time in at least 25 years, as the growth in output at the country’s bioethanol plants drives consumption to a record high. The UK farm ministry, Defra, in its first forecast for the country’s wheat exports in 2016-17 pegged them at 1.50m tonnes. That would represent a tumble of 47% year on year, and the weakest figure since the aftermath of the historically wet year of 2012 which devastated the crop that year and, in preventing autumn sowings, undermined output the following year too. Indeed, data going back 25 years show that apart from 2012-13 and 2013-14, UK exports have only fallen below 1.50m tonnes in one other year, in 2001-02.
  • Ideas of harvest delays price Russian wheat out of Egyptian tender
    Russian wheat missed out on business at a tender by Egypt’s GASC for only the second time in a year as the lift to prices from ideas of a late harvest more than offset the dent from Ruble weakness. GASC, grain authority for the world’s top wheat-importing country, bought 175,000 tonnes of wheat on Thursday at tender, taking the total it has purchased for 2017-18 for import above 1.0m tonnes already, before the season has even started. Indeed, this was the fourth tender that GASC has undertaken for delivery in 2017-18, which begins next month, in a period when it is typically out of the market, with stores boosted by purchases from the domestic harvest. However, this time GASC purchased all its wheat from Romania and Ukraine, spurning Russian supplies for only the second time in the more than 25 orders it has made at tender in the past year.

Summary:

Rain is keeping market futures prices under water. July Corn futures settled at 362.75 losing 6 cents today and July Beans gave up more than double that figure surrendering 12.75 cents of its own. Wheat was down in overnight and in early trading printing an intraday low of 455.50 but it managed to rally starting about an hour after the regular session open and continued higher for the balance of the day. July Wheat was only down 1.75 cents when the closing bell rang.

The recent climate has been good for the crops but not so good for crop prices. For Corn, mounting stockpiles are making it difficult to make a case for any price stability. We shared months ago that a rally into the middle of June may be one of the few major pushes that it can make over the course of the summer. Producers have been holding off in anticipation of potential higher prices and they may have missed a very important opportunity by not selling into the rally into the first week of June.

The USDA Weekly Export sales report showed that Wheat exceeded analysts’ expectations. Corn was right in line and Soybean sales were below expectations.