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London wheat was up yesterday (May 18 +80p; Nov 18 + £1.30) after a mixed day Tuesday (May 18 + 15p; Nov 18 – 60p)
Sterling has not had significant reaction to budget, despite reduced economic growth forecast. Euro still nervous with political manoeuvring in Germany and will Merkel continue?
US markets closed Thursday for thanks giving. Wheat has been ‘creeping’ higher as current low prices should limit the down side. Winter wheat ratings have been downgraded. Corn market is complicated, funds are short and commercials are long, creating a standoff, but if any bullish factors emerge, there could be panic short covering. Soya has been supported recently by better meal and vegetable oil markets.
US markets have been helped by $ decline in November, which is bullish to commodities. The economic index, which is mainly based on oil and gold prices, is at a 1 year high, which would again be seen as bullish influence on commodities.
Russia has been dominating the world wheat export market but there are reports of radiation problems that occurred in September, possibly impacting on wheat supplies. This radiation leak appears to come from the south Urals and Greenpeace want to probe radiation emissions. The almost total lack of reporting would indicate a very insignificant event, but the market bulls are trying to use it as a bullish factor, suggesting wheat grain and plants could be contaminated (wheat prices rose 16% post Chernobyl)
Parts of Europe are still showing a moisture deficit.
Brent crude currently $63+ barrelauthor: Joe Beardshaw