UK November wheat futures continue to keep hitting contract his week. With gains almost every session the price currently ended the week at £175.
Old crop is becoming rather hard to find as farmers begin to hold on to any small remaining quantities fearing that if New Crop harvest yields are as low as some fear then they will not need the space in the barns and will wait to see how high the price goes on scarcity value. Similarly, when trying to buy New Crop, arable farmers are not wanting to over sell until the harvest is in and quality and quantity are known. Early reports are that quality is good but that yields are very varied and down as much as 15% in some areas.
With the UK market still following the EU market, but at a premium, it looks like the UK market is set up for early imports. In turn the EU seems to be following the US. Much of the EU and US having similar poor crop conditions as the UK due to adverse weather imports will not provide a cheap option. The trade is taking cover against end consumers buying in this elevated market. The prospects for lower world wheat prices feel a little remote as there is an increasing chance of El Niño this Autumn, and the overall global wheat supply and demand looks tight, along with low Russian spring wheat yields and the Ukraine showing signs of yields falling for the first time in 5 years. Weaker Sterling further supports the UK wheat price with the £ around the $1.30 mark, its lowest for 10 month, following further uncertainty due to Brexit and more news starting the `what ifs’ of a no deal including Tariffs on imports and delays at docks.
This week we saw soya prices make steady gains from the contract lows reported last week. Tariffs between the US and China are still the strong influence on the funds but with prices so low some buying is happening and the price has started to react. With US farmers finding themselves at a competitive disadvantage, it is reported that investments and purchases are being delayed by many US arable farmers, which could further affect the markets as new season crops are delayed or changed. The pressure is not decreasing in the trade war, with Bloomberg reporting that Trump is ready to go with tariffs on $500 billion Chinese imports. This being the value of all goods imported into the US last year from China. With China importing less from the US, it may look like an easy win for the US but China has measures to counteract the US, such as increasing existing tariffs and tightening regulatory controls. It is also thought that China will continue to investigate alternatives to US soya bean and may hold on to raw materials which they would otherwise normally export, to help them manage without the US soya they normally relies on.
With all the hot weather we have been having you may wish to indulge in an ice cream sundae. However it seems this may at times be more expensive than you would expect.
One NY hotel is serving a $1,500 ice cream sundae. Served in a crystal bear bowl made with champagne sauce, gold flakes and black truffle this ice cream is claimed by the Baccarat Hotel that serves it to be the most expensive ice cream in the country. The 'Bear Extraordinaire' was dreamed up by pastry chef Rosario Wakabayashi, who was inspired by colour and influenced by the Baccarat crystal butterflies collection in the Grand Salon of the hotel. But if it is a little out of your price range you can order it without the crystal bear for a snip at $300!
Alternatively it may be best to ask the price at the ice cream van before ordering for a while.