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London wheat fell 65p yesterday as markets lost momentum
US wheat was sharply down, losing most of the gains from the early part of the week as the short covering petered out. Kansas wheat tour had reported optimistic yields but when all the data is analysed, production could be down 40% year on year.
Latest UN numbers has world wheat stocks up 3.3% for 2017-18 at 247.6 mmt, down 20 mmt year on year. Stocks have increased; wheat consumption has reduced, alternative grain uses have increased – bioethanol.
With all crop estimates there is a time delay and the UN data was compiled a few weeks ago, in the meantime weather has featured.
As a result of dry conditions, French wheat crop rating has reduced 7% good to excellent; winter barley and rapeseed (cold) has suffered greatest damage. Last month, much of France only had 25-50% expected rainfall. Spain, EU ‘s biggest grain importer, is getting to a critical point, crops are more forward and showing significant losses. The UK water shortage is making news headlines, suggestions of ‘hosepipe bans etc.
Sterling slightly down, France expects Macron to win Sundays election, this may support Euro. Early local election results give Conservatives gains.
Oil falls to 5 month low, down 4.78% (Brent $48.38) as world stocks build, US increases production and demand slips.
author: Joe Beardshaw