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UK London wheat has started the week lower, down £1.50 for Nov20 and down £1.00 for May21 for most of Monday’s session, however contracts closed only down c.50p. Last week, London wheat increased by c.£8, mainly on the back of weaker sterling and currency seemed to be the cause of Monday’s lower prices.
UK wheat imports have significantly increased, up by more than 50kt same time last year (July 19’ -July 20’), this is not surprising due to the difficult harvest and lower yields leaving consumers to buy non domestic crop.
Friday’s WASDE report did not have many surprises, no change for Russian or Ukrainian production estimates, the USDA maintained its estimate of 78Mt for Russian wheat production, however other sources estimate production closer to 82.5Mt. EU production has been raised by 650kt, this could be due to a better than expected German crop. Both Australia and Canada had upwardly revised production figures; Australia are expected to increase potential exports with China but may come under greater scrutiny at the ports due to tariffs implemented in May.
OSR came out bullish from the report, there are concerns over production of the next rapeseed harvest in France. It is expected that the potential area could be less than 1 million ha in view of the persisting dryness.
China have continued to buy and in particular US soybean. author: Joe Beardshaw