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London wheat closed down yesterday, old crop down 25p and new crop (2017) down 70p.
UK exports for September show total of 712,000 tonnes so far, this does include a volume of old crop shipped in July, UK exports benefitted from post Brexit sterling weakness. Imports were down 23% year on year for September but these figures would indicate a tight balance sheet going into new year.
New wheat export business from UK is presently struggling due to cheaper alternatives and cheap maize supplies; Ensus could switch to maize if wheat supplies prove difficult to source.
US markets are down, the $ reaches highest level since December; all agricultural commodities (apart from cocoa) are $ denominated and will suffer if $ strengthens. Speculation continues about Trump economic policy and possible tariffs. 75% US farmers voted for Trump as he promised tax cuts for family farms.
Australian wheat crop estimates remain at 27.6 mmt but harvest is slow, eastern Australia is 3 weeks behind; wet weather has helped yields but threatens quality.
Romania may be unable to drill 10% winter area due to weather. Russian and Ukraine crops are potentially looking good but presently colder than average although there is some protection from snow cover.
Scottish spring barley crop from 2016 harvest estimated at 1.3 mmt, lowest total since 1998 and 17% down year on year; fall due to reduced area and lower yields.
Distilling demand has increased as plants come back on stream after maintenance and whisky demand increases helped by exports. Counter to the potential increase in demand, the area of spring barley is anticipated to continue its increase, with the 2017 UK area forecast to be almost 17% higher.
author: Joe Beardshaw