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London wheat had a quiet trading day on Friday and closed the week at only a few pence different to the start of the week. Currency was an influence last week with £ / euro reaching 1.42 before retreating to 1.40 as expectation of interest rate rise receded.
$ was stronger on jobs data (jobs created 271,000 higher than expected) and expectation of interest rate rise = stronger $, weaker $ denominated commodities. Euro weaker helping exports but behind the pace required to shift surplus.
UK customs data actually had U.K importing more wheat than exported to the end of December (314,000 exported , 432,000 imported); exports have improved since September but after two 16 million tonne crops supplies are plentiful especially with the biofuel plants shuts down / reduced usage and a mild autumn reducing the demand for animal feed.
Prices supported by lack of farmer selling but this could mean problems long term when they do sell, unless exports dramatically improve.
USDA report tomorrow - World Agricultural Supply and Demand Estimates.
Market shorts are kept nervous by crop condition in eastern Europe with rumours Ukraine may try and curb exports. Ukraine wheat area could be down 19% meaning production down 30% and much reduced export availability, however in contrast, French wheat rated 97% good to very good.
China continues to struggle with exports and imports are down; China has been the economic engine for global growth.
Lack of rainfall in India has seen domestic prices firm, added to which hoarding takes place as consumers try to secure supplies. author: Joe Beardshaw