22nd May 2019 - Midweek market report


Tomorrow marks the last trading day for May London futures and, over the last few weeks, we've seen a large volume of futures tendered right the way from Edinburgh to Kent. As such, the added weight of physical grain has pushed prices around £10 lower since the start of the month. Consumers are well aware of this and are therefore in no rush to cover late-season slots, possibly compounded by the fact there is still a large discount from old to new crop prices.

New crop markets have been a lot more volatile over the last week, fuelled mainly by weather in the USA. Last Monday, markets were still digesting a bearish USDA which pushed global futures markets to fresh contract lows. Since then, markets have reversed sharply in line with disappointing US spring corn planting data. It was reported by the National Agricultural Statistics Service that corn planting was at 49% versus a five-year average of 80%, due to widespread rainfall inhibiting land work. The window for drilling spring crop is narrowing and this corn story was enough to trigger a round of buying across all agricultural commodities. Despite much more favourable growing conditions throughout the EU, wheat prices in the UK followed suit and November LIFFE futures traded £11 firmer to highs of £150.50 yesterday. This is proof that global prices are sensitive to weather stories but, given the overall bearish global sentiment, growers should be aiming to sell into any rallies that present themselves short term. 

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