Forums
New posts
Forum list
Search forums
What's new
New posts
New resources
Latest activity
Trending Threads
Resources
Latest reviews
Search resources
FarmTV
Farm Compare
Search
Tokens/Searches
Calendar
Upcoming Events
Members
Registered members
Current visitors
New Resources
New posts
Log in
Register
What's new
Search
Search
Search titles only
By:
New posts
Forum list
Search forums
Menu
Log in
Register
Navigation
Install the app
Install
More options
Contact us
Close Menu
Forums
Arable Farming
Arable Market Commentary
Strengthened sterling stalls price push in line with Paris
JavaScript is disabled. For a better experience, please enable JavaScript in your browser before proceeding.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an
alternative browser
.
Reply to thread
Message
<blockquote data-quote="AHDB Cereals and Oilseeds" data-source="post: 8075875" data-attributes="member: 142623"><p>Markets have been very sensitive to new news in recent weeks, with escalations in Ukraine providing underlying support. Increased sanctions on Russia from the West, coupled with <a href="https://ahdb.org.uk/news/usda-crop-conditions-more-woe-s-for-wheat-grain-market-daily" target="_blank">poorer than expected US crop conditions</a> have heightened supply concerns. In turn, this offered extra support to grain markets yesterday including European markets.</p><p></p><p>Since Wednesday last week (30-Mar), nearby Paris milling wheat futures have gained value. At the same time, UK feed wheat futures have lost value. When <a href="https://ahdb.org.uk/news/analyst-insight-uk-wheat-and-barley-on-a-knife-edge" target="_blank">the UK supply and demand situation is tight</a> it could come as a surprise that the UK didn’t track Paris. But this is where exchange rates play a part.</p><p></p><h3>The power of exchange rates</h3><p>Shortly after the invasion of Russia on Ukraine we saw sterling gain strength versus the euro. When wheat markets jumped up, London futures didn’t record as strong gains as those seen in Paris futures because of the strengthening pound.</p><p></p><p><img src="https://projectblue.blob.core.windows.net/media/Default/Market%20Intelligence/cereals-oilseeds/Grain%20Market%20Daily/2022/04.%20April/06%2004%202022/Wheat%20price%20graph%2006%2004%202022.PNG" alt="Graph showing nearby paris milling wheat futures prices versus London feed wheat futures" class="fr-fic fr-dii fr-draggable " style="" /></p><p></p><p>In the past week, we have seen a similar effect. Price gains have been limited in the UK as again, sterling has strengthened against the euro.</p><p></p><p>This said, the US dollar has strengthened against both the euro and the pound, but Chicago wheat futures (nearby) have gained greater value than both European contracts. You could expect European markets to have stronger gains than the US if based on the effects of exchange rates alone. However, Chicago contract movement is stronger on the back of US specific news in the past week. Last Thursday (31-Mar), <a href="https://ahdb.org.uk/news/maize-a-floor-to-uk-new-crop-grain-markets-grain-market-daily" target="_blank">US old-crop wheat stocks were pegged lower (as at 1 March) than trade expectation</a>. At 27.9Mt, these are the lowest wheat stocks at this time of year since March 2008. And on Monday (04-Apr) <a href="https://ahdb.org.uk/news/usda-crop-conditions-more-woe-s-for-wheat-grain-market-daily" target="_blank">the first official US crop conditions report of 2022 showed winter wheat conditions were one of the lowest this century</a>. This news allowed US markets to move higher at a greater rate than other markets.</p><p></p><p>Considering the UK is following global markets, wider news and indeed exchange rates will continue to impact moves.</p><p></p><p><strong>Today's Grain Market Daily on the AHDB website - </strong><a href="https://ahdb.org.uk/news/strengthened-sterling-stalls-price-push-in-line-with-paris-grain-market-daily" target="_blank"><strong>Strengthened sterling stalls price push in line with Paris</strong></a></p><p></p><p>For information on price direction make sure to <a href="https://ahdb.org.uk/keeping-in-touch" target="_blank">subscribe to Grain Market Daily and Market Report</a> from our team.</p></blockquote><p></p>
[QUOTE="AHDB Cereals and Oilseeds, post: 8075875, member: 142623"] Markets have been very sensitive to new news in recent weeks, with escalations in Ukraine providing underlying support. Increased sanctions on Russia from the West, coupled with [URL='https://ahdb.org.uk/news/usda-crop-conditions-more-woe-s-for-wheat-grain-market-daily']poorer than expected US crop conditions[/URL] have heightened supply concerns. In turn, this offered extra support to grain markets yesterday including European markets. Since Wednesday last week (30-Mar), nearby Paris milling wheat futures have gained value. At the same time, UK feed wheat futures have lost value. When [URL='https://ahdb.org.uk/news/analyst-insight-uk-wheat-and-barley-on-a-knife-edge']the UK supply and demand situation is tight[/URL] it could come as a surprise that the UK didn’t track Paris. But this is where exchange rates play a part. [HEADING=2]The power of exchange rates[/HEADING] Shortly after the invasion of Russia on Ukraine we saw sterling gain strength versus the euro. When wheat markets jumped up, London futures didn’t record as strong gains as those seen in Paris futures because of the strengthening pound. [IMG alt="Graph showing nearby paris milling wheat futures prices versus London feed wheat futures"]https://projectblue.blob.core.windows.net/media/Default/Market%20Intelligence/cereals-oilseeds/Grain%20Market%20Daily/2022/04.%20April/06%2004%202022/Wheat%20price%20graph%2006%2004%202022.PNG[/IMG] In the past week, we have seen a similar effect. Price gains have been limited in the UK as again, sterling has strengthened against the euro. This said, the US dollar has strengthened against both the euro and the pound, but Chicago wheat futures (nearby) have gained greater value than both European contracts. You could expect European markets to have stronger gains than the US if based on the effects of exchange rates alone. However, Chicago contract movement is stronger on the back of US specific news in the past week. Last Thursday (31-Mar), [URL='https://ahdb.org.uk/news/maize-a-floor-to-uk-new-crop-grain-markets-grain-market-daily']US old-crop wheat stocks were pegged lower (as at 1 March) than trade expectation[/URL]. At 27.9Mt, these are the lowest wheat stocks at this time of year since March 2008. And on Monday (04-Apr) [URL='https://ahdb.org.uk/news/usda-crop-conditions-more-woe-s-for-wheat-grain-market-daily']the first official US crop conditions report of 2022 showed winter wheat conditions were one of the lowest this century[/URL]. This news allowed US markets to move higher at a greater rate than other markets. Considering the UK is following global markets, wider news and indeed exchange rates will continue to impact moves. [B]Today's Grain Market Daily on the AHDB website - [/B][URL='https://ahdb.org.uk/news/strengthened-sterling-stalls-price-push-in-line-with-paris-grain-market-daily'][B]Strengthened sterling stalls price push in line with Paris[/B][/URL] For information on price direction make sure to [URL='https://ahdb.org.uk/keeping-in-touch']subscribe to Grain Market Daily and Market Report[/URL] from our team. [/QUOTE]
Insert quotes…
Verification
Post reply
Forums
Arable Farming
Arable Market Commentary
Strengthened sterling stalls price push in line with Paris
This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
By continuing to use this site, you are consenting to our use of cookies.
Accept
Learn more…
Top