Back to All Items

Weekly Commodity Report w/e 10th August 2018

The rise in the price of UK November wheat futures has slowed, with even a couple of down days towards the end of the week.  The immanent USDA report due out on Friday is predicted to have the potential to surprise and will no doubt, bring even greater volatility.  Wheat futures are currently trading at £193 in the UK, it will no doubt change as the trade respond to the report’s finding. 


The June customs data shows the biggest monthly wheat import figures for the 17/18 season.  With low physical premiums and current import expectations for July and August, demand for UK wheat may drop in the early part of the season but will likely increase come Nov for many regions.  There has been some rain fall across the UK which may affect harvest (the rate and the quality), and feed manufacturers are busy meeting the demands created by the lack of summer grazing in the ruminant sector as meaning consumer buying is higher than normal for the summer months.  In this market, there are more buyers than sellers, holders of grain are currently reluctant sellers.  The UK wheat market continues to closely follow the movements of the European markets.  It could be argued that UK wheat prices may become less susceptible to the volatility of European markets as we clarify UK supply vs demand figures.

Globally, all eyes are on the USDA report, the first where the media are not given early access to allow preloading of the news stories ahead of the release.  It is likely that Russia will remain the biggest wheat exporter for the second year, despite certain difficulties with crop conditions and reductions in crop size.  It is expected that world wheat stocks will reduce this season, mainly due to losses in the European crop.  The US may use this report to show it is available to assist with the global shortages due to its on-going trade disputes with China having left much of its material needing an alternative home. 


The soya bean trade has continued to slow as prices have lifted and has almost stopped as the trade waits to find out what the USDA report reveal.  Soya bean meal has been less volatile but still shows a flattening of price and reduction traded volumes.  There is an expectation that soya bean yields will be high, which combined with the disagreement between the US and China continuing to be a negative influence on US prices.  This is in turn strengthening the price of Brazilian soya as China’s new preferred trade partner.  However, there are some reports that China will need to resume US soya bean imports soon, despite the increased tariffs and this would change the markets again.  Recent crush and export figures are showing some increase over recent months.  Despite the depressed price of soya and US stocks being high, the opportunity to buy is less positive then it first looks in the UK with the £ hitting a low against the $ at 1.27 not seen in over a year. 

Most writers need inspiration, and the opportunity to avoid writers block.  For Theodor “Dr Seuss” Geisel he achieved that when he visited the Mount Kenya Safari Club in Nanyuki in September 1970.  In his time there he wrote nearly 90% of his classic `The Lorax’.  The inspiration of the trip is clear, with links to the environment and with mentions in his autobiography likening the shape of the trees in the fictional land with those he saw on the trip.  But what inspired the Lorax?

Researchers created mathematical models for the faces of several species of Kenyan monkeys then used an algorithm to group the faces based on similarity in the features.  It showed that the Lorax was most similar to the endangered Patas monkey.  With an orange coat and fuzzy moustached upper lip there are obvious matching characteristics.  But the similarities do not stop there, the book describes the Lorax’s voice as a “sawdusty sneeze” as the Patas monkey’s wheezing alarm call can be described this way.

The same algorithm also showed that the Lorax more closely resembled the Patas monkeys than another orange character of his from “The Foot Book”.  Unfortunately, the Patas monkeys are following the Lorax’s story a little too closely as the population has fallen by half in Kenya in the past 15 years, as the trees they rely on are destroyed by climate change and humans harvesting the trees for charcoal.  The message from the Lorax needs spreading as it is becoming reality for the real Patas monkeys: "."