Frontier Agriculture
Member
World markets
US wheat markets moved higher midweek supported by a rally in corn as rumours emerged that the US could change its biofuel policy, which would mean a higher usage of grains going forward. The rumour was denied by the Trump administration and wheat markets ended up just slightly higher over the week. Weather across the US Plains is also a supporting influence in US wheat markets, with the forecast remaining warm and dry again for the coming week keeping talk of dry conditions circulating, particularly in light of the smaller US planted area.
There is more talk about possible heat and dryness in Australia due to the increased likelihood of a strong El Niño weather event. However, Australia’s 35mmt crop from this year should provide some stock cushion to new season production if the weather event materialises.
Matif wheat started last week with a weaker feel due to a much improved weather outlook with good rain forecast. EU wheat production is expected to rise 6.5% next season as weather so far indicates a return to trend yields is likely. Most of these gains come from France which is expecting production to be up 26% next season, bouncing back after this season’s poor weather significantly impacted yields. However, Matif rallied to achieve a season high on Thursday on the back of the GASC purchase. Egypt has made large purchases of wheat in the last few weeks, totalling around 1.3mmt. The bulk of this wheat was sourced from the Black Sea, but it bought French wheat in last week’s tender for the first time in 13 months.
UK market
London wheat gained £2.05/t over last week and had a reasonably firm start this morning due to weaker sterling and strength in Chicago.
OSR market
Sterling was weaker against the euro this morning as the euro surged due to a new poll which showed Emmanuel Macron beating far right leader Marine Le Pen in the forthcoming opening round of the French elections. On top of this, rising German inflation further supports a stronger euro as the Eurozone may decide to strengthen its monetary policy on the back of the numbers.
Soybean oil was up this morning even against the huge supplies about to hit markets from South America. This is likely due to speculators building long positions on the back of possible biofuel policy decisions from Trump, which would increase summer inclusion levels from 10% to 15%.
US wheat markets moved higher midweek supported by a rally in corn as rumours emerged that the US could change its biofuel policy, which would mean a higher usage of grains going forward. The rumour was denied by the Trump administration and wheat markets ended up just slightly higher over the week. Weather across the US Plains is also a supporting influence in US wheat markets, with the forecast remaining warm and dry again for the coming week keeping talk of dry conditions circulating, particularly in light of the smaller US planted area.
There is more talk about possible heat and dryness in Australia due to the increased likelihood of a strong El Niño weather event. However, Australia’s 35mmt crop from this year should provide some stock cushion to new season production if the weather event materialises.
Matif wheat started last week with a weaker feel due to a much improved weather outlook with good rain forecast. EU wheat production is expected to rise 6.5% next season as weather so far indicates a return to trend yields is likely. Most of these gains come from France which is expecting production to be up 26% next season, bouncing back after this season’s poor weather significantly impacted yields. However, Matif rallied to achieve a season high on Thursday on the back of the GASC purchase. Egypt has made large purchases of wheat in the last few weeks, totalling around 1.3mmt. The bulk of this wheat was sourced from the Black Sea, but it bought French wheat in last week’s tender for the first time in 13 months.
UK market
London wheat gained £2.05/t over last week and had a reasonably firm start this morning due to weaker sterling and strength in Chicago.
OSR market
Sterling was weaker against the euro this morning as the euro surged due to a new poll which showed Emmanuel Macron beating far right leader Marine Le Pen in the forthcoming opening round of the French elections. On top of this, rising German inflation further supports a stronger euro as the Eurozone may decide to strengthen its monetary policy on the back of the numbers.
Soybean oil was up this morning even against the huge supplies about to hit markets from South America. This is likely due to speculators building long positions on the back of possible biofuel policy decisions from Trump, which would increase summer inclusion levels from 10% to 15%.