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London wheat traded down £1 yesterday; despite sterling reaching 3 year low. Sterling suffered from fears of exclusion from single market and ‘fragile’ balance of payments.
EU harvest yields have been further reduced, wheat 5.63 t/h (5.86 t/h last month); corn 6.84 t/h (7.23 t/h),barley 4.77 t/h (4.88). However, all world wheat producers apart from Europe have had bumper yields following previous 3 – 4 good years.
US markets were down as weather sympathetic to harvest and US soya not such discount to Brazil as previous (was 60 cents currently 22 cents)
Wheat values near 10 year low.
Concern about a dry autumn is threatening Russian and Ukraine wheat drillings. Rain is forecast so the threat may diminish; Russia is 50% winter planted. Russian wheat area expected +6%; a weak rouble has helped wheat exports encouraging planting. Russian wheat (+1.2% last week) values have improved; Egypt buying Russian wheat again.
Sterling is weak but Eurozone has its own problems, Deutche bank shares have fallen 50% this year due to fines over irregular trading and Merkel says the government will not step in to support; state support would be in conflict to German government views regarding south European banks. author: Joe Beardshaw