January 18th

Market report

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

London wheat closed higher (old crop + 15p and new + 75p); although sterling is stronger against the euro and $.

Matif wheat also up after recent falls as EU wheat suffers from stronger euro and competition from Russian grain in export markets.

US markets also up with corn rally having biggest gain since november 17; after bearish USDA report of increased yields market supported by commercial buying
Soya up with crush margins of c. 17% increasing demand; meal from the crush helped by higher livestock numbers / demand and meal exports up 8%.

Rain in Brazil may hamper soya harvest.

Wheat also gained.

Despite better soya values and high mineral oil prices osr suffering from palm oil price falls not helped by EU parliament statement that they want to phase out vegoil in biodiesel by 2021 mainly due to environmental concerns; also stronger sterling having negative effect.

UK barley well priced for export markets (wheat barley differential now c. £3 in export / FOB levels although domestic buyers want bigger discount); but may miss big boat trade likely to be supplied France and black sea origin. Danish cheapest source wheat coasters whilst France supplies big wheat boats.

Lack sellers keeps UK wheat shorts nervous.

Snow forecast for Russia to protect against winter kill but temperatures remain above normal / average seasonal levels.

Baltic countries account for less than 5% EU wheat production but exports increasing (Latvia x5, Lithuania x 2) as they benefit from higher protein / better quality putting them third exporter behind France and Romania.

Goldman Sachs has first quarter loss (£1.4 billion) in six years.

author: Joe Beardshaw