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London wheat closed up yesterday £1.05.
Exports of wheat are happening from UK but this is mainly old business being executed. Despite weak sterling, the UK is struggling to compete with Baltic and Black sea supplies.
Sterling near 3 year low against euro despite positive employment figures. Analysts and speculators are very bearish to sterling, but this is not totally due to Brexit as last time they were positive / bullish was November 15.
Germany continues to reduce wheat production; barley down 9%; corn down 12% and oilseeds down 11%. Comparing 2016 and 2015 is distorted because of exceptional 2015 yields.
Russia increases production estimates with wheat raised another 1 mmt to 70 mmt.
US markets were firmer as oil crops markets support other commodities. Export figures soon to be released are expected to be bullish.
Weaker sterling will increase CAP payments to growers by 15% (payments in euros; when converted to sterling) but input prices (imported) likely to increase.
author: Joe Beardshaw