- Location
- Chichester
Old crop was busily traded last week and has now spent six weeks trading more or less sideways at the highs set in early March. The only danger now is in getting stuck at the end with a round peg when only square holes are available. Judging the gap between different markets has become quite tricky. As prices have doubled, so too have the appropriate premiums and discounts for different items. Hence an apparently large £30 spread between old crop and new crop, for example, is arguably only the same as £15 would have been in previous years. Similarly new crop corn at 43 Euros below wheat seems cheap but in percentage terms is probably about right.
It’s hard to say how these differences will play out, but certainly new crop led the way last week – LIFFE setting a new high for Nov and closing the gap on old crop. As the war settles into a potentially protracted next phase it’s possible the eventual meeting point of the two markets will be a high one. Friday’s USDA world supply report held no shocks either way, but certainly nothing to scare the bulls who are concerned at the historically poor condition of US winter wheat. As we’ve said before, it’s a relatively small crop in global terms, much less than half the size of the EU wheat crop which is in excellent shape, but in current circumstances any extra threats to supply are significant. Support should continue this week, albeit as offices empty ahead of the looming Easter break don’t expect fireworks.
Have a good week
It’s hard to say how these differences will play out, but certainly new crop led the way last week – LIFFE setting a new high for Nov and closing the gap on old crop. As the war settles into a potentially protracted next phase it’s possible the eventual meeting point of the two markets will be a high one. Friday’s USDA world supply report held no shocks either way, but certainly nothing to scare the bulls who are concerned at the historically poor condition of US winter wheat. As we’ve said before, it’s a relatively small crop in global terms, much less than half the size of the EU wheat crop which is in excellent shape, but in current circumstances any extra threats to supply are significant. Support should continue this week, albeit as offices empty ahead of the looming Easter break don’t expect fireworks.
Have a good week