The US crop tour is underway with participants calling for record yield potential in Kansas HRW wheat areas. Scouts there are calling yield potential at 58.1bu/ac (3.9t/ha) compared to the 5-year average of 43.1bu/ac (2.89t/ha). Good late rains (see observed map below) have the crop in excellent shape, with the only question hovering over protein content.
The Canadians too are seeing a very timely burst of moisture. There has been a swing away from wheat acres this year, according to StatsCan, citing a move to higher canola and corn acres. Due to the late start, yields have also been revised lower to an average of 3.37t/ha compared with 3.52t/ha recorded last season. Spring wheat seeding (the major class of wheat grown in Canada) is at 74% complete, well ahead of the 5-year average of 48%. The USDA forecasts Canadian production for the 21/22 season to be 33.5mmt, down from 35.2mmt last year.
Canola prices have also come under pressure, albeit not to the same extent as wheat. The Jan ’21 ICE contract has lost about C$35/t since the forecast (and now realised) rain across the Prairies. With the outlook for increased oilseed demand into 21/22, prices are expected to remain firm.
The wheat market is in balance between its own fairly heavy fundamental outlook, with the knowledge that the US corn and bean crops are still heavily reliant on good weather. While the wheat market feels softer, we are still at the mercy of the weather gods.
New crop conditions continue to weigh on the market
The US crop tour is underway with participants calling for record yield potential in Kansas HRW wheat areas. Scouts there are calling yield potential at 58.1bu/ac (3.9t/ha) compared to the 5-year average of 43.1bu/ac (2.89t/ha). Good late rains (see observed map below) have the crop in excellent shape, with the only question hovering over protein content.
The Canadians too are seeing a very timely burst of moisture. There has been a swing away from wheat acres this year, according to StatsCan, citing a move to higher canola and corn acres. Due to the late start, yields have also been revised lower to an average of 3.37t/ha compared with 3.52t/ha recorded last season. Spring wheat seeding (the major class of wheat grown in Canada) is at 74% complete, well ahead of the 5-year average of 48%. The USDA forecasts Canadian production for the 21/22 season to be 33.5mmt, down from 35.2mmt last year.
Canola prices have also come under pressure, albeit not to the same extent as wheat. The Jan ’21 ICE contract has lost about C$35/t since the forecast (and now realised) rain across the Prairies. With the outlook for increased oilseed demand into 21/22, prices are expected to remain firm.
The wheat market is in balance between its own fairly heavy fundamental outlook, with the knowledge that the US corn and bean crops are still heavily reliant on good weather. While the wheat market feels softer, we are still at the mercy of the weather gods.
The week ahead….
Overnight, some bargain buying by China saw a limit up move in corn with wheat going along for the ride. There is also a frost advisory message for some parts of the US corn belt which got the bulls excited. Continue to watch the spring wheat areas of the US Northern Plains and Canada which are facing historically dry conditions and will need excellent in-crop rains to reach full potential.
Have any questions or comments?
Click on graph to expand
Source: http://www.worldagweather.com/
Click on graph to expand
Source: http://www.worldagweather.com/
Click on graph to expand
Data sources: USDA, Reuters, Mecardo
Categories
Have any questions or comments?
The sharks are circling
It was a bloodbath in the agricultural commodities last night, indeed the whole week. Since last Friday, Dec ’22 wheat has lost 139¢/bu or $62/t
Percentiles – June 2022
Mecardo’s Percentiles update for June 2022. Click below to view the latest report Grains Oilseeds Sheep and lambs Cattle Wool Dairy Fuel Percentiles are an important
Opportunity awaits the brave
Where is the opportunity in SWAPS? Any keen market watcher will have noticed the discrepancy between AUD Futures (SWAPS) and the cash price. The spread
Yield forecasts down but still exceptional
With the winter crop largely in the ground, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) have released their first estimates of
Don’t have an account with us? Join free.
You can have full premium access to all of our content with a monthly or annual subscription.
Alternatively, create a free account to access our Insights blog and two free premium article a month!
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
Research: Analysis of the Australian sheep flock
In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.