Frontier Agriculture
Member
World markets
A weak US dollar helped wheat turn around the negative start made at the beginning of the week. Yesterday was a volatile day for currencies with the US dollar lifting towards the end but Chicago wheat still closed slightly firmer. The US Drought Monitor shows winter wheat areas experiencing drought at 44% which is unchanged on last week. The forecast does not show that any rain is on the way but it doesn’t look to be as cold next week, as had been indicated. There is adequate snow cover over much of the wheat area now.
The Argentine Ministry of Agriculture have raised their wheat production estimate to 18.5 million mt from 18 million mt previously. The South American weather forecast shows limited rainfall across most of Argentina, with the exception of heavy rains to fall in the far north. Parts of the grain belt are suffering from dry conditions but this will be more of a concern for corn in the short term – the planted area for corn estimates has dropped to 8.7 million hectares from 8.8 million hectares previously.
The euro made new highs yesterday which initially pressured EU wheat but Matif recovered to close unchanged on the day, holding onto Wednesdays gains. Brussels announced EU wheat shipments at 364,000mt giving a season total of 13 million mt, still down 18% on last year. The Russian rouble continued to firm, supported by strong crude oil. Russian export values are still extremely competitive despite this.
UK wheat
London wheat closed slightly lower yesterday with May 18 down £0.35/tonnes at £138.65/tonnes – stronger sterling has not been helping wheat markets.
Domestic feed demand is keeping spot prices relatively firm and this is favourable for farmers in a year when the lack of export opportunity runs the risk of building pressure on UK values towards the end of the season.
A weak US dollar helped wheat turn around the negative start made at the beginning of the week. Yesterday was a volatile day for currencies with the US dollar lifting towards the end but Chicago wheat still closed slightly firmer. The US Drought Monitor shows winter wheat areas experiencing drought at 44% which is unchanged on last week. The forecast does not show that any rain is on the way but it doesn’t look to be as cold next week, as had been indicated. There is adequate snow cover over much of the wheat area now.
The Argentine Ministry of Agriculture have raised their wheat production estimate to 18.5 million mt from 18 million mt previously. The South American weather forecast shows limited rainfall across most of Argentina, with the exception of heavy rains to fall in the far north. Parts of the grain belt are suffering from dry conditions but this will be more of a concern for corn in the short term – the planted area for corn estimates has dropped to 8.7 million hectares from 8.8 million hectares previously.
The euro made new highs yesterday which initially pressured EU wheat but Matif recovered to close unchanged on the day, holding onto Wednesdays gains. Brussels announced EU wheat shipments at 364,000mt giving a season total of 13 million mt, still down 18% on last year. The Russian rouble continued to firm, supported by strong crude oil. Russian export values are still extremely competitive despite this.
UK wheat
London wheat closed slightly lower yesterday with May 18 down £0.35/tonnes at £138.65/tonnes – stronger sterling has not been helping wheat markets.
Domestic feed demand is keeping spot prices relatively firm and this is favourable for farmers in a year when the lack of export opportunity runs the risk of building pressure on UK values towards the end of the season.