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London wheat closed up (c. £0.50) on Friday to make 2 days of positive movements. Afternoon trade saw values retreat from morning highs and London wheat was down 50p-£1.00 on the week. May – November spread extends to £12.85
US markets were also up, this time supported by soya beans as corruption scandal in Brazil actually supported ‘real’, making Brazilian exports more expensive.
US wheat concerns about dry plains continues to make shorts nervous. In general US commodities appear to be on the rise, oil continuing to firm could increase bioethanol production / demand, copper is a 4 month high, lumber is at a 6 month high, oil 2 month high in US.
2016 world wheat area estimated down 1.4%, low prices curtail production but stocks remain plentiful.
French wheat rated 94% good to very good (91% this time last year) and growth stages ahead of normal due to mild conditions.
Russian grain production forecast 5 mmt down year on year but winterkill estimated 9% against normal 12%. Russian corn record crop? Ukraine wheat production for 2016 estimated down 20% due to dry autumn.
It is reported that 14% French spring barley has been drilled (34% this time last year), only 6% has emerged, progress is hampered due to conditions similar to UK.
El Nino affects southern Africa with drought causing major crop production issues; in northern Africa, Morocco is seeing their harvest potentially cut by 50%. author: Joe Beardshaw