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UK and US markets were closed yesterday; Paris was open and registered 0.50 euro losses. London wheat closed Friday down £0.05 on the week and down £1.85 from close on April 30th 2016
French wheat rated good to very good down 2% on week at 83% compared to 91% this time last year.
Mars (EU forecaster) has raised EU 28 wheat yield to 5.85 t/h (+4.5% against 5 year average) but below 2015 crop of 6.02 t/h. Barley yield at 4.99 t/h +5.7% above 5 year average.
UK barley differential to wheat (new crop) reduced to c. £7; £6 would see maximum inclusion in rations; this time last year differential was £18 for 2015 crop.
June forecast for eastern and northern Europe is for warmer than average conditions
Russia anticipating record grain crop of 109.3 mmt (record 108.2 mmt 20080; last year 108.8 mmt, production boosted by corn potential but wheat likely to be second biggest ever
UK exports have reduced carry out to 2.5 mmt up 3% year on year; exports put at 2.75 mmt?? (imports hefty). Barley exports at 1.90 mmt at 19 year high and 27% up on 2015; end of season stocks down 30% compared 2015 at 1.01 mmt.
US markets supported by corn and soya, demand for soya meal has raised prices 54% in 2016 alone; high meal prices has increased corn demand as an alternative.
Ethanol producers are benefitting from higher oil prices with added bonus of rising DDG prices, demand for meal and DDG’s likely to support wheat if price differential continues to increase.
Brent crude hits $50 barrel, first time this year and oil price sup 85% from February lows.
Sterling remains firm on anticipation of remain vote but debate gets increasingly vitriolic and many polls indicate a close prediction, the decision may depend on voter turnout.
author: Joe Beardshaw