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London wheat closed up £1.15 yesterday despite sterling stabilising. Funds are short covering in U.S and Paris supported market.
USDA report is due today, this has made markets nervous and funds are reducing their position. The October USDA report tends to have market impact as production and yield more reality rather than projection. Soya yields expected to increase but how much of this is factored in?
UK wheat exports for season have been put at 457,000 tonnes (including 80,000 to France) but this includes a chunk of old crop.
Weak sterling and good quality is making UK wheat attractive but there still remains a lack of farm sellers.
Egypt, despite ergot problems and cash ‘tightness’, projected to import record amount of wheat (11.8 mmt?) due to growing population; currently imports are behind last year meaning acceleration maybe required.
Oil trading at $52 barrel, Russia has announced it may join OPEC. Stronger oil prices firms rouble making Russian wheat more expensive in world markets.author: Joe Beardshaw