September 17th

Market Report

Our market reports are opinion based and are not instructions to trade. You are responsible for your own trading decisions
London Nov 15 wheat gained £1.60 on Monday but has now lost these gains in the last two days, abundant wheat supplies and little buying weighs on the market.
Markets supported by a lack of physical sellers and a £7.75 carry between Nov 15 and May 16, this is making trade sellers nervous; currently Nov 16 is trading at £13.65 above Nov 15.

Russia is on course to export 4.5 mmt of grain this month, a majority of this is wheat, nearly 1 mmt grain were exported in the first 9 days of September. There are also rumours of exports taxes being relaxed.

Following on from reduced French corn, Spain is the latest country to announce 10% reduction in corn production; however this news is having little effect on markets due to the glut of wheat and alternative corn supplies.

El Niño is predicted to peak at the end of year, but so far there is limited impact on grain, Australia is talking of 17 mmt wheat exports, this is close to the average.
Bullish news of freezing temperatures in Brazil and wet conditions in Argentina have posed threat to wheat crops.

Russia has experienced 33% below average rainfall in wheat areas and the two week forecast is dry, this is threatening plant growth / establishment; planting schedule is already behind. Ukraine also experienced drilling problems, only 61% intended osr area drilled and planting window is now closed.

The US federal bank will today announce whether interest rates will rise for first time since Dec 2008, their decision will be largely based on whether they feel the economy is strong enough. Stronger $ would affect $ denominated commodities and could put pressure on developing countries economic growth and financial stability, some Chinese analyst have come out and said that last month’s collapse was due to speculation of US interest rate rises.

U.S markets were confused early yesterday when the Farm Service agency published planting figures, they issued figures for 2014 rather than current 2015 crop areas.

author: Joe Beardshaw