US ethanol production has continued to recover post pandemic, with ethanol production reaching near record levels. At an estimated 1106k barrels per day production in the US, this is now just shy of the all-time record set in late 2017, said the UK analysts.
With corn gaining, wheat has also remained supported, pushing higher.
Markets in the UK have also received supportive data, with the release of UK balance sheets, and supply and demand information.
“With an expected animal feed use this season [in the UK] of between 7.2-7.5Mt, domestic demand for wheat is recording a recovery this year, coinciding with what has been a buoyant global market, pushing up the cost of not only wheat, but all inputs.”
Mixed prospects for oilseeds
While grain markets have been pushing higher, the prospects for oilseeds have been more mixed, commented the oilseed and grain market specialists.
Crude oil has broken out of the bullish upward trend, falling back below US$85/bbl.
The CRM Agri team said the fall back in crude markets has also been reflected in vegetable oil, with Chicago soybean oil also falling during the week. The fall in oil markets has pressured soybeans and also led to a degree of pressure on rapeseed, they said.
“Amid pressure from a crude oil market reversal, US weekly soybean export sales also disappointed. Net sales of 1.184Mt were down 59% from last week, and 22% below the four-week average, although China still purchased over 1Mt. Exports at 2.4Mt were however encouraging, up 9% from last week and 81% above the four-week average, again mostly to China.”
With Northern Hemisphere supply now well known for next season, attention is turning to South America, keep a close eye on what so far has been a fast planting progress pace.
“Australia will be key too, with hail having caused damage there, it remains to be seen if the damage to properties extends to crops.”