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Weekly Commodity Report w/e 6th October 2017

Sterling is volatile, and whilst it rose to peak mid September, it has fallen in value against the $ and € in recent days (the Boris effect?), the value of UK wheat has increased.


Matif wheat has also been on a rising trend so that Liffe wheat is at a €4-5 discount to the Matif. Defra reduced the 2016 closing UK wheat stocks by 0.275mt to 1.76mt. If we produced 14.6mt wheat this year, and import 1.5mt wheat (1.83mt last harvest year), then analysts estimate that we will have an exportable surplus of less than 0.5mt. Current prices would indicate that we are neither able to export nor import. Russia’s wheat harvest is about 95% complete, not bad for 26mha, with an average yield of 3.3t/ha, so some 85mt is in the barn. UK November futures is trading at £143.85, a rise of £1.50 on the week.

The US wheat Associations are delighted that Trump has invoked the WTO regarding China's tariffs on imported wheat and other agricultural products. Apparently there will be two ‘investigations’, the first will review China’s domestic price support programmes for wheat maize and rice (which are designed to keep China’s farmers farming, and its city people supplied with food) as the US believes that these programmes represent $700m in lost export opportunities. The second investigation will examine China’s compliance with a WTO commitment to import 9.6mt wheat, as the US suspect skulduggery.


The IGC has increased its estimates of world grain production for 2017-18 by 19mt to 2087mt (a record2133mt last year) with a usage of 2096mt. Maize production is estimated to be 1029mt, wheat 748mt, of which usage is estimated to be 1058mt and 742mt respectively, resulting in ending stocks of 208mt and 248mt respectively. World soya production for 2017-18 is expected to be a comfortable 348mt (351mt last year). The USDA stocks report was routine, with US maize and soya levels slightly below par, and spring wheat stocks higher than expected. The funds bought maize and soya on the news. The weather in Brazil is still dry, with little planting in Mato Grosso, which indicates that yields may be lower than last year, and so soya has attracted fund attention even though ending stocks are at a 10-year high and 50% higher than the same time last year. However, experience indicates that high stock levels do not deter fund action. UK GM soya has lifted £10 over the week to about £291/t export.

China has decided to halt its strategy of auctioning landslides from its domestic maize mountain, and is said to want to encourage consumers to purchase new crop which is currently being harvested. This is a little weird; either China has reduced its massive stockpile from some 250mt to more reasonable levels (50-100mt?) or cannot compete with new crop prices, or it is trying to conserve its stocks? A few years ago China was experimenting with a couple of bioethanol plants, and it has been recently suggested that they will introduce the E10 petrol standard across China. If this is correct, this could mean that their maize mountain would become more valuable to a point which might even pay for its inflated cost of production (incentives to farmers) and storage. It would also deplete its mountain, and the higher prices would mean that its subsidy programme could be reduced; it could also allow for China to import cereals from the US.


As reported in the Dundee Courier on Tuesday 4th June 1889, ML Hussey announced that he had spent 11 years and secured 13 patents on his new invention, an electric watch with an internal battery that replaced a third of the moving parts. 

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The newspaper image is Copyright THE BRITISH LIBRARY BOARD. ALL RIGHTS RESERVED. Reproduced with kind permission of The British Newspaper Archive

Unfortunately, no such watch appeared until 1957, when the Hamilton Watch Company of Lancaster, Pennsylvania released the first electrically powered watch, the Electric 500. Unfortunately, their platinum and cobalt battery caused corrosion making the World’s first battery watch temperamental.