Review of the week

August CBOT soybean contracts plunged 41 cents during the week, retreating from one-week highs, during an abrupt Friday freefall. "Mostly favourable weather in the Midwest is helping the (region's corn/soy) crop," said Doane Agricultural Services. "While some hot and dry weather is expected in the Midwest, the heat wave is forecast to be temporary, and soil moisture levels remain adequate."

September CBOT corn futures closed with losses of 12 1/4 cents, after late-week losses erased two-week highs achieved Wednesday. "There continues to be much debate regarding the final results of late-planted crops," said MF Global. "Most traders are looking for yield estimates sharply higher than previous USDA numbers ... as a result of near-perfect weather through the month of July."

September CBOT wheat lost 17 cents on the week despite a modest rally Friday. "There are no signs that cash wheat prices will go back to the $9-$10 level," said Oklahoma State University extension farm economist Kim Anderson. "Substantially higher wheat prices require lower-than-expected U.S. corn production, U.S. spring wheat production, or foreign wheat production. At the present time, this does not appear very likely."

November London feed wheat closed the week with a loss of £3.25/tonne on harvest pressure and reports of largely favourable yields across much of the EU.

As Gleadell note in their weekly report the volumes coming out of Bulgaria, Romania and the Ukraine are sizeable and are setting the benchmark for not just the Spanish Mediterranean market but also North Spain – both traditional UK markets. More worryingly, aggressive offers are being made into Brittany and ‘any origin’ feed wheat (eastern European origin) has traded into North Germany.

EU wheat production could rise well over the current estimate of 131 mln t – possibly to 134 mln t say Gleadell. This would give the EU an exportable surplus of approaching 20 mln t, and to compete on the export market at the moment our prices must move lower.

August Paris-based milling wheat closed the week with losses of just EUR0.50/tonne. These are some concerns that rains throughout June & July may adversely affect wheat quality in France, Germany, the UK and Ukraine. This is helping widen the differential between feed and milling grade wheats.

August Paris corn lost EUR9 on the week pressured by ideas that there is likely to be more feed grade wheat around in Europe this year than originally anticipated.

The Paris November rapeseed future lost EUR4.50 during the course of the week, largely due to harvest pressure. The UK harvest is seen around 40% complete and the word "variable" seems to be being widely used to describe it. The French and German crops however are reckoned to be around 90% done and yields and quality there are much better.

As with wheat the Ukraine has had a bumper rapeseed harvest & will be an aggressive exporter in the coming season.

September crude oil finished the week 37 cents higher than it ended the previous Friday. A volatile week saw it trade around $4 either side of the close with a low for the week of $120.42 and a high of $128.60/barrel.