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London November wheat closed down £1.60 yesterday as agricultural commodities suffered falls, this was largely due external influences rather than fundamentals.
US markets traded sharply lower on opening before recovering but still down for the day, losses have been attributed to funds reducing their positions as they are nervous of imminent Brexit vote and the potential impact on financial markets. Non-commercials are holding major positions and the markets can be directed by non-fundamental influences.
Weather forecast for US could indicate ‘flash drought’ before late summer rains; however currently soil moisture is generally good. Concern will increase if the dry period coincides with corn pollination; hot dry weather at this stage can reduce yield.
Strategie grains reduced their total estimate of French and German wheat crop by 1.3 mmt, this is due to rain and lack of sun. Malting barley prices have firmed as wet weather increases fusarium risk in spring barley.
Wheat harvest forecast 10 days lateauthor: Joe Beardshaw