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Weekly Commodity Report w/e 7th September 2018

November wheat futures finished the week on a small gain following a full week of price drops finishing the week at £174.60/T.


The wheat market currently seems to be susceptible to new stories, including:

  1. The news that Russia announced that there was no need to implement export curbs giving a sense of availability of their wheat to export.

  2. Late in the week confirmation that the Vivergo biofuels plant will close at the end of the month permanently (not for maintenance as previously reported) which seemed to give the UK supply and demand sheet a big push towards balance. 

It should be noted that when calculating global crop shortages in the main exporting countries and factoring in the smaller and early UK harvest this year, that the supply and demand balance sheet remains tight, so volatility is not over for this season.  Globally, we still see predictions of decreased crops, increasing uncertainty about world trade due to trade wars, and more locally the Brexit uncertainty adds to the unsettled picture.  All of these issues are effecting currencies and adding unknowns to a very tight market.  EU trade has been low this week with little interest from farm.  EU exports are at almost half of last year’s figure at 2.1 Mln T v 4 Mln T of last year.  Although following a similar pattern to the UK the EU market seems to be hitting resistance and slowing despite any real news.  As the UK wheat market needs to maintain its competitiveness to the EU market to prevent exports it is likely this will support both markets.

Russia provided most of the focus globally as the market seemed to take news that they would not be placing  restrictions on export as ‘for now’ rather than permanent.  The Russian export trade is booming but this was taken as `taking advantage while we can’ from both sides.  In further comments the Russian agriculture minister stated interest in releasing 1.5 Mln T of grain from its intervention stocks in Siberia to help stabilise its own domestic price.  It seems that the trade want to see a more obvious move towards the US in the export market before accepting news that availability in agricultural commodities is where it is needed.  With a further USDA report coming out soon, the trade are awaiting what it will show before reacting, especially following the dismissive reaction to the August report which was considered to be inaccurate.  With currency and policy driving exports at this stage of the seasons it is felt by many that there is much potential for further volatility.


Soya bean meal prices have continued to be volatile this week, trading up and down on most days.  President Trump continues to prepare further tariffs on Chinese imports worth $200 billion.  As the comment period ends, it is hard to see either side backing down.  There have been reports that some US soya has arrived in China, and it is rumoured that they have allowed imports from Ethiopia to diversify import origins and help meet domestic demand.  There has been a dramatic increase in the use of alternative protein sources such as sunflower, which demonstrates China’s determination to reduce its reliance on the US whilst the trade war rumbles on. 

Reports continue that the US expect exceptional corn and soyabean yields according to NASS.  Export sales remain low for the US year with Turkey and China continuing to choose other origins whenever possible. 

It could be said that the US only needs to wait with global supply tight and demand high before demand for their raw materials returns. 


An Art exhibition in a museum in Portugal by British-Indian artist Anish Kapoor has been a little too successful in demonstrating the artist’s interest in negative space.  The piece known as ‘Decent into Limbo’ is a concrete room containing only an 8ft deep curved pit painted so black that its depth is almost impossible to see.  With some visitors seeing a bottomless hole others have wondered if it was merely a circle drawn on the floor like something out of a cartoon. 


Recently one visitor has disproved both by falling into the pit!  Despite warning signs and a guard in place a 60 year old Italian man has been treated for injuries after falling into the pit which also resulted in damage to the exhibition.  But if you are interested in seeing this for yourself fear not the museum plans to reopen it soon – just be careful you don’t fall in.

Read more about this online here