September 11th

Market Report

Our market reports are opinion based and are not instructions to trade. You are responsible for your own trading decisions.

Yesterday London wheat closed unchanged, there is speculation of whether the bottom of the market has been seen at £110 November futures (currently £112); a range of influences (currency/ exports, southern hemisphere weather, Russian exports, corn crop etc) make a firm prediction difficult.

HGCA latest estimates have wheat harvest 70% complete but yields have increased to 8.5-8.7 t/h from previous 8.3-8.6 t/h, this would mean 16 mmt crop; Scotland only 10% cut.

French wheat crop estimated as high as 40.7 mmt and exports are struggling but Egypt has raised its moisture spec from 13 to 13.5% until end of May 16, this should help chances of export.

French corn crop is down 25.7% compared to last year but last year was a record crop!

USDA report is due out today; September report has a reputation of being a low key report. It is expected that U.S yield will be cut and a reduction in corn and soya stocks but this was suggested last report. If corn stocks are cut it could see stocks to use ratio at 12% = Bullish

Global food prices have fallen at their fastest rate for 7 years (last month -5.2%) largely due to market glut, embargoes (Russia & china) and demand reduction (economic slowdown).
FAO raised world wheat crop to 728 mmt (+ 5mmt) and stocks a 13 year high at 202 mmt.

Despite rumours of interest rate hike, US wheat and corn firmer as $ weaker, there have been no new highs in last 6 months.
European GDP and falling unemployment could see euro firmer; sterling uncertain.

author Joe Beardshaw