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Weekly Commodity Report w/e 5th March 2018

This week, UK May wheat futures broke through the £140/t ceiling for the first time since January, briefly touching a 3-month high of £144/t on Thursday before closing at £142.50.  US May wheat futures exhibited a similar trend.  The UK market seems to be stronger as rumours persist that Ensus is about to restart production and helped by a weaker £ against both the $ and € which pushed London wheat to three-month highs.   


The US story seems to be about drought, the lack of any predicted rainfall and the poor condition of US winter wheat, all of which is attracting the attention of the funds who are in buying mode.  Thus US wheat futures hit the highest levels since August last year, when you might recall the milling wheat disaster in the Dakotas.  Both the UK and US markets appear to be benefitting from the very cold Russian weather which, as cold as it is here, it is even colder in Russia and playing havoc with their export facilities.  The drought in Argentina, currently affecting soya, is predicted to adversely affect their next rotation crop – maize.  In South Africa, their drought is predicted to reduce maize yields. 


Matif wheat also hit a three-month high, possibly because of the current cold weather and the rising prices in the Black Sea.  The EU increased their carry-out stocks by another 1.6Mln T, but this was insufficient to dampen the market.  When priced in €, UK May wheat futures are trading at €160.0 compared to the Matif at €167.50.  Platts graph indicates that the Matif prices are now close to that of the Black Sea, which suggests that UK wheat is almost competitive to export, which if true, is not good news, prices are less likely to fall.


Soybeans continued to close higher over the week.  Prices were higher overnight on continued concern about the prospect of the reduced size of the Argentina soyabean crop.   The Buenos Aires Grain Exchange (BAGE) has reduced their estimate of Argentinean soya production to 44Mln T from its previous forecast of 47Mln T.  Argentinean weather maps show increased likelihood for rains next weekend.  This reduction could help the US soya bean industry by protecting it from the threat of stiff penalties on US soyabean exports in retaliation to President Trump announced tariffs on imports of aluminium and steel.  The main exporters of which, China, Japan and Mexico are all major buyers of US soya, making it a prime target for levies.

The remains of England’s most notorious and richest pirate Captain Black Sam Bellamy may have been discovered on the wreck of his ship the Whydah Gally.  The wreck was discovered in 1984 after sitting untouched since 1717 when it sank in a storm after hitting a sandbank on Cape Cod.  Black Sam is reputed to have taken 53 ships and gained treasure worth $120 million in less than 1 year when he died aged just 28 years old.  Objects including gold, ivory and other treasures have been retrieved from the ship over the years.  But only in the last few weeks archaeologists discovered and extracted a human femur from a 1,630 kg mass.   The bone was discovered close to what is believed to be Bellamy’s pistol.   The University of New Haven will now attempt to collect a DNA sample from the bone and it is hoped it will be matched with DNA from a living descendant of one of Black Sam’s siblings.   If matched it is thought his skeleton will be returned his birthplace in Devon to be buried beside his mother. 

View the news video to find out more.