August 12th

**MARKET REPORT**

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

London wheat shed all recent gains closing down £2.60 yesterday; European wheat down €4.50 and European maize down €3.0, the fall was triggered largely by economics and the burden of new crop supplies.

Yield reports have caused a revision to U.K wheat production, +16mmt crop anticipated; previous expectation 15.2-15.4mmt, this is compounded by the big 2014 crop which left a 2.0 mmt carryout after net exports (after imports) totalled 270,000t. At the current price and sterling levels the U.K wheat can compete with French and Danish supplies, but the problem is a lack of buyers.

Global markets were rocked by China again cutting the value of the yuan for second day, this also dragged down other currencies (Australia, Malaysia) and could trigger a currency war. China reduced yuan to try and stimulate exports / economy.

USDA report is due today, markets are uncertain / nervous of content as the report will include field data for first time, recent cool conditions are beneficial to corn development.

French corn production has been put at a 9 year low, added to which some of the corn is being cut for silage due to poor grass growth. Imports could potentially come from Ukraine but they are suffering from heat.

author: Joe Beardshaw