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London wheat closed down £1.50 yesterday, sterling stronger at 1.14 currently against the euro.
U.S markets are weaker, wheat reaching new low, despite 100,000 tonnes of hard winter wheat being sold to Iraq; wheat down trend has been in place since July. Corn harvest is backward; 54% cut (last year 73%), but benign weather conditions do not pose a threat at this stage. Trump due to appoint new Fed chair on Thursday, Jerome Powell is the favourite.
Russia announced it will cut internal rail rates to boost wheat supplies. In 2010, Black sea wheat was 10% of global market, now it accounts for 16%, indicating the areas growth.
World wheat stocks are heavy, but there are concerns about 2018 crop. Going into Northern hemisphere winter, crops in Russia, Ukraine and parts of Europe not looking as robust as expected, whether this proves a problem we do not know, but with Southern hemisphere crops down, this could have increased impact.
Oil continues to gain, Brent crude currently $61+ barrel; OPEC and Russia contemplate extending cuts, world stocks are diminishing.
author: Joe Beardshaw