Our market reports are opinion based and are not instructions to trade. You are responsible for your own trading decisions.
London wheat started the week up, May + 15p ( £146.35) and November + £1.05 (£153.55)
Sterling slightly weaker as polls indicate reduced Tory lead; indications are, it is a difficult to predict the result, there is the threat of another unclear majority, leaving the UK in the same present situation!
Brexit extension gives opportunity for continued exports but wheat may feature more than barley.
US markets are weaker, $ stronger despite recent Fed interest rate cut (0.25%); third cut this year.
Better weather is helping harvest and rain in Brazil is helping crops, US exports are lagging.
2020 could see record US corn area of 94.5 million acres, whilst winter wheat lowest area for 110 years…possibly?
US farm bankruptcies are up 24%, highest level since 2011, an estimated 40% farm profit based on subsidies (trade aid, insurance, disaster payments etc )
Attention is switching to 2020 crop, Russian wheat area could be 16.3 million hectares, up 400,000 from last year’s record area; condition and crops are good so far.
Ukraine suffering dry conditions; 2019 crop saw Ukraine grain yield up 8.3% at 4.7 t/h compared year on year.
French wheat planting progress by 28th October was 58% complete compared to 70% this time last year.
UK well behind on planting, some predictions of 14 mmt wheat crop are optimistic? Maybe too early to predict.
In current circumstances, an increase in UK spring barley area is fundamentally bearish but, it could be supported by stronger feed values due to reduced winter drilling and the question of whether quality can be as universally good again?
Still the unknown of Brexit and export business, how will UK feature?
Egypt, at latest tender bought, Romanian, French and Ukrainian wheat; Russian origin too expensive in comparison.
Since July, EU wheat exports 18.84 mmt (last year 5.9 mmt), Romania number 1 followed by France.
Barley exports up 37% at 2.57 mmt
Corn imports + 19% at 6.76 mmtauthor: Joe Beardshaw