February 16th

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 up 20p but on thin volume.

US markets, especially soya and wheat, were higher as a combination of weather and weaker $ giving market direction. Ag coms are perceived weak compared to share market; gold reached values equivalent of 2017 highs ($1357).

Soya meal stronger, breaking price resistance levels, whilst soya oil weaker. Argentina, the biggest meal exporter, continues to suffer from dry weather; soya yields estimated down 40% year on year and 80% crops suffering stress.
Argentina is also the third largest corn exporter.

2018 UK wheat looks tight with an estimated 14.2 mmt crop; tight supplies from current crop in the north is continuing to pull more tonnages from the south of the country.

Export demand is strong for old crop barley, presently trading at near parity to wheat, and especially with imminent Saudi tender.

French wheat is trading at lower premiums compared to traditional UK levels, taking into account quality differences etc.
French wheat stocks likely to swell due to slow exports; EU exports down 19% year on year due to strong euro and black sea competition. Barley exports are up 17%; corn exports down 61%, corn imports + 52%

Malting prices have eased but concerns remain as weather delays planting in Europe and UK, this is supporting winter malting prices but, domestic winter barley demand c. 300,000t against total trade of 1.9 million tonnes.

Global barley production estimates for 2018 are down 4 mmt compared 2017, underpinning barley markets.

Major players e.g Cargill and Bunge investing heavily in Ukraine infrastructure which could see their exports up 50% in 3 years; presently Ukraine is 4th largest exporter.

author: Joe Beardshaw