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London wheat continued the rise from Wednesday, November 16 wheat closed up £1.60. Wheat found support from other commodities rather than significant fundamentals.
US soya was yesterday up 44 cents / bushel due to concerns about mid-west drought and strong world demand for meal and protein. This increase has dragged up corn but wheat is becoming an increasingly cheaper alternative.
Latest UN forecast has world wheat production for 2016 showing 6 mmt surplus for production over demand, but there are concerns about crops in Canada (Alberta), Brazil and North China.
Extreme rainfall in France (up to 3x average rainfall in May for some areas) has seen some downgrading of yield and quality, some estimates are putting wheat crop down 6.3% compared last year; drier weather is forecast.
UK wheat finding demand, 3 UK vessels are allegedly to load for Asia in June. Higher protein of UK crop giving advantage over Danish supplies and Baltic offers have reduced.
Sterling slightly weaker on continued referendum views; it is estimated an exit vote would weaken sterling 9% and an in vote would strengthen 4%.
Australia forecast to have best wheat crop for 5 years, up 10.7% due to sufficient rain.
Oil slips below $50 as OPEC do not impose output ceiling, feels markets are improving.
author: Joe Beardshaw