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November London wheat closed down 10p, although other positions showed positive gains. UK wheat was boosted late in the session by Governor Carney hinting at interest rate cuts this caused sterling to fall but has since largely recovered.
Yesterday’s USDA report saw a big uplift in soya as planting increase was not as big as expected, growers did not switch out of corn due to rotation, pesticides etc. 3.5 m acres has come back into production, weather prevented cropping last year, however soya area is still up. Dry forecast for U.S has also lent support especially soya where demand is robust.
Apart from interest rate threat, the U.K saw current account deficit (value imports v’s exports) at record levels; economy grew 0.4% first quarter 2016.
Coceral raise EU 28 soft wheat production by 3 mmt to 148.01 mmt (1.35% below last year). Corn up 6.56% to 62.36 mmt and barley also increased 4 mmt, both of these compensate for wheat decline year on year.
Glencore hails ‘window of opportunity’ for UK wheat exports as cheap freight, ample supplies and weak sterling enable opportunities. A 70,000t vessel is due to load next month at Immingham, bound for Vietnam; traditionally UK exports target European homes.
Differential between wheat and corn values also helping as consumers switch to wheat. If UK production is down this harvest, it will see reduced surplus but carryout will still be up due to old – new crop premium incentive.
The EU has seen its credit rating fall from AA+ to AA; financial and economic uncertainty prevails.
It has been reported that the ozone thinning in the Antarctica is slowing (thinning since 1980’s) the thinning has been blamed for some of the extreme weather .author: Joe Beardshaw