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On Friday, London wheat traded £1 down, 2015 crop down £1.70 on the week and 2016 crop down £2.20 on the week; the May – November carry is now £9. U.K wheat has fallen largely due to currency, sterling firming to 1.32+ (.756p) against the euro.
Currency will be influential in trade when there are so many supplies available.
Since President Macri came to power the Argentinian peso has fallen 40%, combined with reduced export levies, this has meant Argentinean wheat is well placed.
Oil has had a minor recovery, having fallen 18% since start of the year it has now recovered 6%, and is currently c. $32 barrel.
A slowing Chinese economy and a 12 year low oil price makes markets nervous, IMF revising world growth in 2016 down to 3.4% from 3.6% forecast in October.
Ukraine and Russia has been experiencing heavy rain, many areas have had 3 times the seasonal average.
US markets, especially corn, has been showing market resilience as commercial demand supports prices.
author: Joe Beardshaw