Important updates and advice regarding coronavirus (Covid-19)

Mid-week market report - 6th March 2019

Wheat-Sampling-2

Wheat

For the first time in a while, futures markets closed yesterday slightly firmer in the UK, EU and USA despite nothing fundamentally bullish to fuel the support. In the USA, widespread freezing conditions and snow continue to cause logistical issues for the transportation of grains which has increased nearby delivered prices. However, crops underneath the snow are currently rated better than last year which bodes well for new crop.

In the EU, wetter weather should offer some relief to growing crops which have struggled through the last few months with limited soil moisture. The European Commission forecast 2019/20 common wheat production in the EU at 140.8 million tonnes versus 128.7 million last year in its first supply and demand outlook for next season. As a result, EU exports are predicted to rise to 25.5 million tonnes versus 18 million this year.

Domestically, wheat prices continue to slide as consumer demand remains lacklustre. Uncertainty remains around the 2018/19 crop-size because of the disparity between the BPS and AHDB data sets, with the latter increasingly feeling overstated. Despite this, there is a £16 inverse from old crop to new crop which is typical in a year with tight end of season stocks. As a result, long-holders of wheat should note that this may have already been priced into the market.

Oilseed rape

A recent decline in OSR values has been attributed to Canada's continued extradition attempt of Huawei CFO to the US. This has led to rumours that China will curtail imports and pursue anti-dumping action against Canadian canola seed sold there. This leaves Canada looking for an alternative destination for one million tonnes of canola, with the EU a likely option.

Sterling remains much unchanged against both the US dollar and euro. A WASDE report due out on Friday may add a little direction and uncertainty over Australian canola plantings for 19/20 will support the market on further falls. However, focus remains mostly on nearby logistics and pressure at the moment. 

Frontrunner - 8th March 2019
Frontrunner - 1st March 2019

Related Posts

 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Thursday, 13 August 2020

Captcha Image

We use cookies to improve our website and your experience when using it. Cookies used for the essential operation of the site have already been set. To find out more about the cookies we use and how to delete them, see our Cookie Policy.

OK