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Friday London May 17 closed down 20p and November 17 up 35p; UK wheat registered gains of c. £2.00 for the week however at the time of writing old crop has firmed up. UK old crop wheat is stuck in a range supported by a tight balance sheet.
European wheat crop potential looking good, French wheat rated 93% good to excellent; UK crops good apart from oilseed in eastern England. EU forecast EU wheat crop up 5.7% year on year at 143 mmt but this is below other predictions of 150 + mmt.
Sterling falls below 1.16 against euro but there remains split opinions on forward trends; sentiment that the euro is gaining and sterling is falling appears to be gaining traction, based on European voters rejecting anti EU policies; but we have seen how misleading polls can be!
US markets are quiet as changes to biofuel mandate appear to be a rumour and unsubstantiated. There is an expectation that the FED may raise interest rates, this would potentially strengthen $ and be bearish for agricultural commodities. If $ gains it would make European wheat; both euro and sterling when prices compared in $, more attractive.
China announces reduced growth for 2017 at 6.5%; growth in 2016 was 6.5 – 7%, the lowest levels for 26 years.
author: Joe Beardshaw