Frontier Agriculture
Member
World Markets
US wheat has continued its decline with fund selling pressuring futures lower. Focus remains on trade issues between the US and China as they continue to make headlines. Weather for the US harvest has been favourable, allowing them to push on at a pace 8% faster than the five-year average, winter wheat is now 41% complete versus 39% last year and 33% on the five-year average. Spring wheat ratings dropped one point to 77% good to excellent versus just 40% a year ago.
Australia has a slightly wetter forecast, with the driest areas of Western Australia in particular expecting some showers. However, it doesn’t look like enough moisture will fall overall and the planting window is now closed in some regions.
Matif wheat futures closed lower, with negative US wheat and general weakness in global commodity and equity markets pressuring values. Weather across Europe has been varied this season, with some areas getting excessive rain in the spring (mainly France) and others suffering from dryness. It is still dry across the Baltic which is a watch point and, as harvest approaches, the main question will be around any impact on quality. The state weather forecaster for Ukraine has said that their grain harvest could fall to 59.3 million tonnes from 61.3 million tonnes in the 2017 season as a result of dry conditions. Heat continues to build across Russia’s winter wheat areas, with spring wheat areas still cold and wet. Neither extreme is helping crop prospects.
UK Markets
London wheat closed lower yesterday but it did hold value fairly well in comparison with the US and Paris. Hot and dry conditions which are a concern for the potential of UK wheat crops are keeping London wheat from falling as hard as other exchanges.
The domestic market is seeing both farm and merchant stocks still emptying out, with everyone wanting stores cleared pre-harvest. This has depressed old crop values to the tune of £5.00/t in the few days. However, new crop values remain strong and are currently trading at a premium to French prices. Farmers are not committing to more forward sales in light of current weather conditions, making yields hard to call. Consumers on the other hand are looking to fix new season values, keeping domestic demand sharp.
US wheat has continued its decline with fund selling pressuring futures lower. Focus remains on trade issues between the US and China as they continue to make headlines. Weather for the US harvest has been favourable, allowing them to push on at a pace 8% faster than the five-year average, winter wheat is now 41% complete versus 39% last year and 33% on the five-year average. Spring wheat ratings dropped one point to 77% good to excellent versus just 40% a year ago.
Australia has a slightly wetter forecast, with the driest areas of Western Australia in particular expecting some showers. However, it doesn’t look like enough moisture will fall overall and the planting window is now closed in some regions.
Matif wheat futures closed lower, with negative US wheat and general weakness in global commodity and equity markets pressuring values. Weather across Europe has been varied this season, with some areas getting excessive rain in the spring (mainly France) and others suffering from dryness. It is still dry across the Baltic which is a watch point and, as harvest approaches, the main question will be around any impact on quality. The state weather forecaster for Ukraine has said that their grain harvest could fall to 59.3 million tonnes from 61.3 million tonnes in the 2017 season as a result of dry conditions. Heat continues to build across Russia’s winter wheat areas, with spring wheat areas still cold and wet. Neither extreme is helping crop prospects.
UK Markets
London wheat closed lower yesterday but it did hold value fairly well in comparison with the US and Paris. Hot and dry conditions which are a concern for the potential of UK wheat crops are keeping London wheat from falling as hard as other exchanges.
The domestic market is seeing both farm and merchant stocks still emptying out, with everyone wanting stores cleared pre-harvest. This has depressed old crop values to the tune of £5.00/t in the few days. However, new crop values remain strong and are currently trading at a premium to French prices. Farmers are not committing to more forward sales in light of current weather conditions, making yields hard to call. Consumers on the other hand are looking to fix new season values, keeping domestic demand sharp.