Frontier Agriculture
Member
World markets
US wheat ended slightly lower on Friday but still in positive territory over the week, supported by the drop in US plantings from the USDA report at 32.4 million acres, the lowest area since 1909. Global wheat ending stocks, however, came in at a record high of 253.9mmt, reinforcing the bearish market sentiment that has been prevailing following the last three seasons of booming wheat production and the resultant growing stocks. The weather outlook for the US has improved after reasonable rainfall across the Southern Plains last week and a forecast for this week showing more widespread rainfall and above average temperatures, which should alleviate crop stress from recent dryness.
Harvest in Argentina is all but finished now with BAGE putting it at 99% done last week, with a crop number of 15mmt. This is in line with the USDA number and represents a 39% increase on last year’s crop. The USDA left the Australian crop at 33mmt despite the heavy rain it experienced through December.
Matif wheat ended lower last week with a stronger euro. EU shipments were 137’000mt with the season total of soft wheats shipped now falling behind last year’s pace, at 13.16mmt shipped versus 13.26mmt last year. The USDA had raised EU exports by 500’000mt to 25.2mmt. It left Russian exports unchanged but increased the crop by 500’000mt. It is cold in Russia this week but snow cover is thought to be sufficient.
UK market
London wheat futures closed £3.50/t higher over the week, making new contract highs with sterling dropping to 11 week lows last week. This morning UK wheat was stronger again after sterling started weaker ahead of Theresa May’s speech tomorrow and an expectation of a ‘hard Brexit’ line and the possibility that she will signal Britain will fully break out of the single market. Trump’s indication of willingness to do a trade deal with Britain may provide some reassurance.
OSR market
Sterling fell sharply overnight as the market prepares for Theresa May’s speech on Tuesday, causing OSR values to move higher.
US wheat ended slightly lower on Friday but still in positive territory over the week, supported by the drop in US plantings from the USDA report at 32.4 million acres, the lowest area since 1909. Global wheat ending stocks, however, came in at a record high of 253.9mmt, reinforcing the bearish market sentiment that has been prevailing following the last three seasons of booming wheat production and the resultant growing stocks. The weather outlook for the US has improved after reasonable rainfall across the Southern Plains last week and a forecast for this week showing more widespread rainfall and above average temperatures, which should alleviate crop stress from recent dryness.
Harvest in Argentina is all but finished now with BAGE putting it at 99% done last week, with a crop number of 15mmt. This is in line with the USDA number and represents a 39% increase on last year’s crop. The USDA left the Australian crop at 33mmt despite the heavy rain it experienced through December.
Matif wheat ended lower last week with a stronger euro. EU shipments were 137’000mt with the season total of soft wheats shipped now falling behind last year’s pace, at 13.16mmt shipped versus 13.26mmt last year. The USDA had raised EU exports by 500’000mt to 25.2mmt. It left Russian exports unchanged but increased the crop by 500’000mt. It is cold in Russia this week but snow cover is thought to be sufficient.
UK market
London wheat futures closed £3.50/t higher over the week, making new contract highs with sterling dropping to 11 week lows last week. This morning UK wheat was stronger again after sterling started weaker ahead of Theresa May’s speech tomorrow and an expectation of a ‘hard Brexit’ line and the possibility that she will signal Britain will fully break out of the single market. Trump’s indication of willingness to do a trade deal with Britain may provide some reassurance.
OSR market
Sterling fell sharply overnight as the market prepares for Theresa May’s speech on Tuesday, causing OSR values to move higher.