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London wheat closed 25p down yesterday; the differential between Nov 16 and Nov 17 c. £8
UK wheat values are being supported by weaker sterling, spot demand to fill boats and reluctant sellers. Bank of England is due to meet today, current interest rates are expected to be maintained, a ‘dovish’ statement is expected and will keep sterling weak.
French 2016 wheat crop estimated 13 mmt down year on year (41 mmt v’s 28), exports down 43% sub 12 mmt. French average wheat yields 5.45 t/h, lowest for 33 years;
Uk wheat crop estimated 14.5 mmt.
French wheat is being exported to Eastern European homes; India importing Ukrainian wheat!
US markets are lack lustre after bearish USDA report (ample supplies), however rain is delaying corn and soya harvest. Funds are at a record shorts and at some stage they will need to reduce positions / take profits, this would cause a buying surge and potentially influence UK prices.
Recently planted Ukrainian crops are being threatened by dry conditions; same situation happened this time last year, but crops recovered.
Romanian trader demands $500,000 compensation for cancelled cargo or ‘performance bond’ due to ergot problems. Russia threatens to ban Egyptian citrus products.
Oil weaker at $46 barrel.
author: Joe Beardshaw