March 30th

Market Report

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

Last week, London wheat went through a rollercoaster ride on prices; early in the week the price shot up by £7.30 followed by significant drops and only to finally end the week 60p up on May 20 and £1 up on Nov 20. Most of this volatility was attributed to currency, fundamentals will continue to be the main focus but currency is having greater influence than usual.

UK old crop wheat is trading at a significant discount to French wheat, however new crop Nov 20 is at a premium to Matif, this will potentially hold down UK wheat as imported wheat continues to be competitive.

According to Agrimer, French spring barley drilling had accelerated last week. Overall, 72% of drilling is now complete compared with 40% previous week and 97% at this point last year.

Dry weather across western Europe has aided drilling and with this dry spell expected to continue into early next week. Conditions of French crops have remained stable this week, 63% in good to excellent conditions, compared to 85% at this point last year.

The International Grains Council published a revised estimate for global grain production yesterday. The IGC has projected a record production level in 2020/21 of 2.2 billion tonnes (Bt), up 2% Y/Y.

US wheat was up on the week, however Corn continues to be under pressure, mainly due to the reduced demand in Bioethanol.

The last day of March can be one of the year's most volatile sessions in the ag markets, largely because of the planting intentions report from the U.S. Government.

Oil prices continue to drop as coronavirus ravages economies around the world. The price war launched by Saudi Arabia almost three weeks ago after talks with Russia over price stabilisation broke down has sent prices to their lowest level in 17 years. The Brent crude price was around $65 per barrel at the start of January.

author: Joe Beardshaw