Over the week, Sterling has gained against the $, but stayed static against the €. Supportive influences came from good industry performance, and rising labour costs increasing the likelihood of an imminent interest rate rise. On the other side of the equation, our trade deficit grew to its largest amount at £14.245 billion, and like the Brexit talks, and the lack of real progress, are ready to undermine Sterling.
Wheat prices slipped during the week, with five progressively lower futures closes, falling to six-week lows, in part with pressure from the USDA report which confirmed record global wheat stocks.
The AHDB released its first official estimate of the size of the UK wheat crop this year at 15.163 Mln T, which was higher than last year. As harvest has only just finished, it is hard to understand the accuracy of the figure, and more complex is the proportions of milling and feed wheat. The variable quality of what was grown as milling wheat is making the S&D figures more complex.
Russian wheat production is still a subject of discussion as they dominate global wheat exports with the cheapest prices. Russian exports are over 3 times higher so far this season, compared to last year. Harvest is not quite complete, and the USDA lifted the Russian wheat production above the previous September estimate to 82 Mln T. There is a good chance that the large crop will be replicated next year, as planting for next year’s crop is at 83%, and should be complete well before the usual winter weather arrives, signalling the end of planting. The USDA report did take 1 Mln T from the previous projections for the Australian harvest dropping it to 21.5 Mln T, but the trade considers this to still be too optimistic.
On Chicago futures markets Soyameal reached a 12 week highs in $ terms, pushing delivered to the mill prices close to £300, and Soya beans hit 11 weeks highs. The rise was fuelled towards the end of the week by the bullish USDA report, where yield predictions at 49.5 bushels per acre were well beneath trade estimates or 50 bushels per acre. The lower yields, matched with smaller stock created the bullish sentiment. The same report marginally reduced global production of soya to 347.9 Mln T. For the first time for many years, CONAB has predicted a lower Brazilian harvest than last year. The 2017/18 harvest is predicated to be 106-108 Mln T, as opposed to the last harvest at 114 Mln T.
Soya is being harvested in the US, but is a little behind average progress for the time of year, and good weather forcasts look to improve the pace in the next few weeks.
Samuel Johnson’s adage that 'a fishing rod is a stick with a hook at one end and a fool at the other' was again proved right this week, when a fisherman who had caught a Dover Sole decided to give it a kiss before he threw it back. The 14cm fish jumped down his throat cutting off his air supply.
His friends administered CPR, and paramedics managed to save him a few minutes later. After 6 attempts to free the fish it finally was pulled from Sam Quilliam’s throat.
Sam says that he will not stop kissing fish he returns, but will only kiss the bigger fish. Some people are overly keen to remove themselves from the gene pool...