Our market reports are opinion based and are not instructions to trade. You are responsible for your own trading decisions.
London wheat continued its upward trend closing up £2.20 November 16, gaining £5.05 for the week. However, the November contract has also been pushed up on technical reasons and other forward contracts did not achieve quite the same increase.
UK wheat continues to benefit from weak sterling, recent reports stating UK economy is in for prolonged weakness due to reduced consumer spending and lower investment. Bank of England has spent £1 billion buying corporate bonds to protect economy. During this period of a weaker sterling there has also been a reduction in migrants; is the UK now not seen as such a good destination / earning opportunity?
EU wheat exports are 17% ahead of this time last year, despite little French volume. The USDA has for the season EU exports 28% down year on year; if current pace continues stocks will be tighter.
US markets are firmer, ignoring last week’s bearish USDA report; Dec corn 2 month high and Dec wheat 7 week high. The market is supported by nervous short covering and increase exports; US wheat cheapest priced wheat in Egyptian tender but lost out due freight (Egypt bought Romanian & Russian).
French winter wheat 23% planted (34% last year) and barley 39% (54% last year).
La Nina and drought threat is still in the news but this has featured for a while and possibly accounted for in the market.
Brent crude c. $52 barrelauthor: Joe Beardshaw