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London May 17 wheat was up £1.80 and November 17 + £0.55; the exaggerated May contract rise was technical, tender day is looming and ‘quirky’ values may continue for the next few days.
Currency and weather are the market drivers and in terms of £ / euro, currency had a benign day yesterday. UK annual government deficit estimated to be the lowest since 2008 financial crisis, borrowing has been reduced by £20 billion to £52 billion.
French wheat loading is destined for UK; UK old crop is stuck in a range, rising domestic prices together with stronger £ are attracting imports but the UK prices have a limited downside due to tight supplies.
Weather is increasingly becoming a feature, some areas of Europe are down 25-50% on rainfall, although cooler temperatures have reduced evaporation. May – June are the critical months when crop stress becomes a major threat; however some reports estimate 2 mmt barley and 1 mmt wheat may have already been lost in Spanish potential production due to a lack of rain.
US corn and wheat markets found support yesterday, mainly due to continued wet and cold weather delaying planting. Soybean oil also gained due to commercial buying and expectation of legislation / protection that may come in to deter Argentinean bio diesel ‘dumping’.
Oil up 1% with Brent crude $52author: Joe Beardshaw