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London wheat futures were down on the previous week C£3.50 -£4.50 on May and Nov contracts respectively, however opened this week higher for both old and new crop. May 20 / Nov 20 has increased it’s spread, presently C. £11, this is increasing the opportunity to carry wheat into next year. London wheat May20 is down 3.80 on the week whilst Nov20 settled 4.45 lower on the week.
GBP was relatively stable compared to the previous weeks but, depreciated towards the end of last week, this benefited London wheat futures.
French soft wheat condition rated good to excellent has dropped from 62% to 63% week on week, this is well below last year’s rating of 84%.
Last week it was announced the Russian government’s April – June 7Mt grain export quota had been approved. This is unlikely to have an impact as this is what they would have been likely to export in this period anyway. The agriculture ministry, which has 1.8 Mt of grain in its stockpile, had previously planned to sell 1 Mt from it; in total, it is planned to send up to 1.5 Mt of grain to the domestic market to meet the needs of the flour and bakery industry, as well as the livestock industry.
CBOT Corn is heading towards it’s lowest levels in more than a decade, this has been related to the reduced bioethanol demand caused by restrictions borne out of the coronavirus. Between 40 -60% reduction in bioethanol demand, depending on location in US, has led to C. 7MMT of less corn required. Cost of corn production against value is nearing it’s bottom line and will potentially see fewer acres planted.
WASDE report this coming Thursday._Joe Beardshaw