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London wheat 16’crop closed £1.20 down yesterday as lack of bullish news. London wasn’t helped by weaker sterling which fell due to economic figures; UK manufacturing contracted in April first monthly decline for 3 years.
Global wheat crops all appear potentially good apart from north China and Poland.
US markets fell, soya had been the market leader providing ‘spill over’ support to wheat and corn but as it fell it took other commodities with it . Rain in US has seen their winter wheat rating climb to 61% good to excellent from previous 59%; corn planting progressing well.
Russian rouble has strengthened making their grain exports less competitive. Russia talking of supplying water to dry areas of north china
Yesterday Oil fell 2% as plentiful stocks weigh on the market.
Funds can influence markets away from the fundamentals; there is extremely high intensity / speculative trading in Chinese markets, for example steel. It has been estimated a steel futures contract in China is held for an average of 4 hours, whereas an oil futures contract in US is held, on average, 40 hours. Even egg trading in China has outperformed the stock market. With this amount of activity is there a danger of a sudden collapse in Chinese markets?? author: Joe Beardshaw