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London closed £1.40 down on old crop and 80p down on new crop, the UK followed weaker European markets. May – November spread now £10.65
European markets were spooked by Russian rumours. Previously markets lifted by talk of Russia increasing grain export duties. Latest rumours are they may remove duties on wheat exports but impose them on barley and corn. Even if Russia exited wheat exports there are enough other eager sellers. The weakness of the rouble makes Russian grain ‘cheap’.
US markets are quiet, wheat down, soya up and corn neutral. The Federal reserve left interest rates unchanged, the US economy is slowing, global equity markets are down and there are inflation concerns. This should weaken $, weaker $ should help agricultural commodities.
South American weather have conflicting reports, Argentina is dry (corn) whilst Brazil (corn and soya) ‘never looked so beautiful’.
Generally, La Nina follows El Nino; if La Nina materialises it could cause hot dry conditions for US corn areas, but it is not certain La Nina will follow.
UK markets are being influenced by sterling, presently slightly weaker as the latest Brexit referendum polls have it split 50-50. Possible exit would damage sterling, but a UK exit could also weaken Europe / euro.
Oil continues to have modest gains.
author: Joe Beardshaw