UK wheat flat despite the Sterling climbing to a 9-month high against the euro

CRM AgriCommodities

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Arable Farmer
Location
UK
Cereals
UK wheat ended today's session virtually unchanged despite the Sterling rallying further against the single currency on dovish comments from the ECB.

As such, the pound was set to settle at a 9-monthhigh against the euro after it posted its best 11-day performance (+3.9%) since mid-september 2017.

The bullish gap between £154.50 & £155.25/T on Nov-19 LIFFE feed wheat was nearly filled today.

In a dearth of fresh news, Mar-19 Matif tested its 2-week high technical resistance of 207€ in the wake of a struggling euro which dropped below the $1.13 mark for the first time since mid-December, making the European origins more competitive on the export market.

Major importers are eager to secure more grains in case of any export restrictions put in place in the Black Sea region. The Russian AgMinistry has requested from the ports a weekly update on grain exports.

According to today's Farm Futures survey, the US All-wheat planted area for the 2019harvest is seen at 46.6Mac or -2.5% on last year whilst the US corn acreage is set to increase by 1.3% to 90.3Mac.

Overview of today's IGC report (more clickhere):2018/19 World total grains production (wheat + coarse grains) = 2,089MMT vs 2,079MMT at the end of November and 2,102MMT last year.

Stocks are raised 6MMT to 566MMT from November and compared to 614MMT LY.

World Wheat: 2018/19 production and consumption are raised respectively 8MMT to 737MMT and 6MMT to 739MMT compared to November estimate and as such, stocks are pegged at 263MMT vs 270MMT last year.

For 2019/20, the IGC expect a 13MMT increase in production to 751MMT although it 'is seen being completely absorbed by smaller opening stocks (-7MMT y-o-y) and assumed growth in consumption (+6MMT), potentially leaving the carryover at the end of2019/20 unchanged year on year.'

World Maize: 2018/19 production is raised 3MMT to 1076MMT from November and compared to last year's 1047MMT. Stocks are up 5MMT to 271MMT vs 304MMT a year ago.
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Oilseeds

Matif rapeseed was mixed with the Feb-19 contract which will expire next week ending higher whilst May-19 snapped a 4-day winning streak on technical consideration after it climbed to a 2-month high above its 375€ technical resistance.

The US soybean complex was close to equilibrium level awaiting further news regarding the US-China trade discussions.

The US Commerce Secretary Ross stated that the US and China are still 'miles apart'from resolving the trade issues but he added that there was 'a fair chance' of reaching a deal.

After a prolonged period of dryness, DERAL lowered its 2018/19 Paraná soybean harvest from 19.1MMT in December to 16.8MMT. However, conditions improve with 93% of the crop rated 'Fair/Good' vs 88% at the beginning of the month.

Paraná, situated in southern Brazil, is the country's second largest soy producer, accounting for about 20% of the national crop.

The IGC pegged the 2018/19 world soybean crop at a record 363MMT vs 367MMT in November and 341MMT last year. The 'bigger crops in the US and Argentina [will] likely more than offset a smaller harvest in Brazil'.

Palm oil continued higher for a 5th straight session, reaching a near 5-month high, over an expected increase in exports and reduced production in South East Asia.
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Futures & Options prices
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