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London May 16 wheat contract closed up by 50p on yesterday’s trading, Nov 16 up 70p; the May 16 Nov 16 spread is still substantial at £12.
French wheat hit its lowest price in 5 months, however later in the day trading turned the price round to end the day on a gain of 1.8%.
The recent WASDE report continued the bearish sentiment on grains, added to which US ethanol stocks have hit new highs. The US is also experiencing its longest slump of corn exporting, not helped by reports that Russia has banned US corn and soy due to misleading quality certificates.
Suggestions of US rate rises through 2016 give the dollar strength, but weaken the export competitiveness, if and when the dollar weakens it may open up another supply of grain to the world market.
Argentina has benefited from significant rain to end the long spell of dryness.
Brent crude prices are moving sideways, but have come down from a recent rally in over the last 3 weeks, they are back at prices last seen in mid Jan.author: Joe Beardshaw