January 13th

Market Report

Our market reports are opinion based and are not instructions to trade. You are responsible for your own trading decisions.

London wheat closed up £1.25 on old crop and up £0.85 on new crop making May – November differential £9.50. How wide can this spread become? Allegedly there are traders who see £10.50 as a trading spread opportunity.

Sterling falls below 1.15 against euro as Brexit concerns and current account deficit weighs on sentiment. There is talk that sterling may fall to $1.10 (currently $1.21); euro has its own concerns as attention switches to forthcoming French elections in April, what is the price on political risk? FTSE records 11th day running record close.

Yesterday’s USDA report caused some excitement, soya beans closing up 28 cents and wheat 13 cents. Soya stocks were reduced despite record harvest, 36% estimated available supplies were used in the first quarter, demand remains strong. Winter wheat area in US lowest since 1909. Whilst there is bullish trend appearing, there is still major concerns about possible trade conflicts / disruption when Trump takes control.

Extreme winter weather and strong winds are disrupting grain shipments from Eastern Europe.

UK rapeseed production for 2017 is estimated at 1.89 mt; down due to smaller area and crop losses. The reduced production should make the balance sheet tight and likely to see UK rapeseed markets at premium to Europe.

author: Joe Beardshaw