UK grain prices are flat as market forces work against one another
UK wheat values remain stuck in a narrow range as two major factors continue to cancel each other out.
Sterling has firmed from £1.11 to £1.15 versus the euro since 10th January and this should have caused a loss for UK wheat values.
Instead, EU markets have been given a lift by connecting on Egypt's latest tender of 360,000 tonnes. For the first time since July 2017, France sold 180,000 tonnes in this trade
UK barley prices remain vulnerable to Brexit. With a surplus in England, prices are drifting lower in the short term as UK exports are not currently competitive on the world market.
Oilseed markets influences by political dispute and currency movement
The UK oilseed market is still focused on political issues such as the US/China trade dispute and the value of sterling during the Brexit process, rather than stock levels or shifts in supply versus demand.
Long holders of old crop oilseed rape in the UK have been faced with a relatively dull market in this post harvest period. A tight balance sheet theoretically supporting the market has been negated by the rise in sterling this week.
On Tuesday, the European Commission accepted that US soybeans meet the technical requirements to be used in biofuels in the EU. This news has weakened the European oilseed market slightly.
Looking ahead to 2019/20, the MATIF values (Europe) are very similar to those for old crop, implying that the balance in the market in Europe is not expected to alter. However, with six months of the growing season still ahead, a lot could change.
