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London maintained its rise on Friday, bringing weekly gains to £4 on old crop and £2.90 new crop wheat.
Sterling had a volatile week but closed at similar levels to the start of the week. Brexit progress stumbles on; EU reluctant to give further concessions, many of the current EU leaders remember giving Cameron better membership terms to win referendum, which did not succeed!
US markets were quiet on Friday but, closed slightly down on the week.
Markets, especially soya, had been rising in anticipation of Chinese business, however whilst China did buy nearly 2 million tonnes soya, this volume was seen as disappointing.
Chinese corn production is the lowest for 4 years, there maybe demand for corn imports and added to Chinese relaxing import duty on US autos, this might be an indication of ‘relaxed tension’. China did however still produce substantial corn crop and area was cut to try and reduce stocks.
General markets had negative sentiment towards the end of the week, stocks / equities weaker, oil down, concerns about global economic growth (incl China), stronger $.
Strategie Grains predict EU wheat production for harvest 2019 at 5 year high, 147 mmt, up 13% year on year and largest since 2015.
UK forward wheat prices highest since 2013/14 and 15% above this time last year, despite increased EU production and Brexit uncertainty.
Russian domestic wheat prices increase as supplies tighten and weather hampers shipping; a Russian ministry meeting is planned for this week and the export programme is on the agenda.
Russian wheat cargoes have problems in Vietnam due to weed contamination.
Argentina reduce wheat crop estimates.
Christmas week can often see some dramatic movements in markets with lower volume meaning markets can be ‘bullied’.author: Joe Beardshaw