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London wheat closed down 20p on new crop but had gains for the week + £2.10, old crop and + £1.85 new crop. Physical demand to the north has seen premiums over the futures; reports of wheat being shipped from the south coast to Hull. Maize can replace wheat for some ethanol production but tight domestic wheat supplies are supporting values.
US markets have performed better than expected, even with the threat of tariffs overhanging the market. Tariffs have not been imposed yet as sabre rattling takes place between US and China. The US export programme starts in earnest in September, there are hopes that a resolution will be reached by then.
China has a swelling livestock / meat demand and this needs soya meal; soya has c. 4 times protein content of alternatives and Brazil can only supply so much, as a side note, Brazil are having beneficial rain. US growers could switch from planting soya to corn; corn planting until end of May, soya end of June.
US Wheat was up Friday as problems persist, winter wheat in the great plains is now suffering from freezing conditions combined with drought; spring wheat in northern plains and Canadian prairies experiencing cold conditions which is slowing planting.
French wheat rated 78% good / very good compared to 90% this time last year; winter barley 74%, last year 85%. Spring barley nearly complete but much later than normal.
Southern Russia , Ukraine and Romania experiencing temperatures 3 – 6 degrees above average but moisture reserves are good and conditions helping spring planting.
Feed barley demand from UK remains high but trade is constricted by a lack of old crop supplies. New crop could come under pressure as traditional home (Spain) has good crop prospects following rain and South American corn could be cheap alternative but European balance sheet could be tight if China remains as a buyer.
Oil values are down, oil markets have worst week for 2 months, US stocks and production increase combined with trade tensions. author: Joe Beardshaw