August 20th

**MARKET REPORT**

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

Yesterday London November wheat closed up £0.65, this was in contrast to lower European values. The trend has been declining prices, London wheat down 13% in July, Paris wheat -12% and Paris corn –7%.

Falls in wheat prices prompted by heavy yields and increased carryover. French yields are up 8% on last year and production put at 40+ mmt, hot weather has helped rather than hindered crops. German yields are down by 11% however this has been cancelled out by carryover stocks that are up 30%.

U.K wheat quality should increase domestic consumption and reduce imports but flour millers are noted for their absence from the market.

Russian wheat harvest is 50% complete, yields are down 9.2% (3.23 t/h), this is likely to reduce even further as harvest advances north but grain production still estimated 100+ mmt.

US markets are down, especially soya beans, as rain helps pod fill. Markets are still digesting USDA numbers, for example increased yields in Indiana corn were at 142.94 bushels / acre; USDA 158 b/a. Recent areas of ‘preventative’ plantings (areas not drilled) are higher than expected, this figure will need correcting in future USDA reports.

Oil prices remain depressed but some analysts expect a price bounce to $70 barrel, currently Brent crude c. $47.

The Euro remains €1.40 to the £, Barclays predicting €1.47; U.K interest rate rise is still in debate. Differential between U.K and French wheat increases.

Greek agreements adds some economic stability but concerns remain about Chinese demand which has been the ‘commodity engine’.

Russia destroys food in retaliation against European sanctions and arrests 6 people for smuggling European cheese into Russia.

author: Joe Beardshaw