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Having registered a fall of £1.50 last week, yesterday November 16 wheat closed up £1.25. Sterling tried to strengthen in response to economic comments from Osborne, but then fell. Analysts are split between whether sterling has been oversold and could bounce or whether further decline expected. Carney hinted at rate cut sooner rather than later.
US markets were closed yesterday, national holiday; corn is pollinating and soya pod is set so all attention is on the weather. US weather for corn belt over the next 7 days indicates slightly higher than average temperatures but some showers. Soya markets supported by soya oil exports; exports are up 39% year on year, Mexico number 1 destination
Strategie grains reduces EU rapeseed production, down 3.1% to 21.24 mmt with average yields 3.37 t/h; production lower than other forecasts.
French wheat good to excellent down 6% at 65% due to continued wet weather; barley is also downgraded 5%. Algeria is the favoured destination for French wheat. Algeria may need to import 8 mmt, a big increase but French quality could struggle to reach required specification.
IGC put global cereal crop second biggest on record, production 16 mmt above consumption.
Favourable weather has raised Russian crop production. Extra production combined with falling prices could increase exports 26.5 mmt wheat in 2016-17 (24.6 mmt 2015-16). Despite reduced area and dry autumn Ukraine may produce similar sized crop to last season.
Brent crude remains c. $50 barrelauthor: Joe Beardshaw