Since the 14th December we have only had eight days trading. On the 14th, May 2019 wheat futures ranged from £178 to £181, and since then has traded within those limits and currently resides at about £178/T on very low volumes.
The UK market has been seasonably quiet with the focus on mill deliveries rather than on new purchases. Some farm sellers felt the need to sell some grain remembering the mid-November lows of £171/T and released some tonnage to the grain trade. Recently Defra cut the 2018/19 UK wheat harvest from 14 Mln T to 13.95 Mln T and predicted 6.2% lower yields on next year’s crop. Although not an insignificant change or unexpected, this combined with the on-going Brexit situation and currency changes continues to be a strong driver to UK cereal value.
Just prior to Christmas the Russian agricultural ministry met with its exporters and whilst the world anticipated a curb on wheat exports, Reuters reported that Russia would increase its grain exports from 38-39 Mln T to 42 Mln T for 2018/19, of which 37 Mln T is to be wheat. The Ministry subsequently denied this, so there is significant confusion in the market. It seems that Russia has exported 20 Mln T wheat to date, and that a further 14 Mln T will be exported in the first half of the New Year, so that a total of 34 Mln T of Russian wheat will be exported this harvest year. The threat of Russian export curbs has supported wheat prices globally for most of this season so the market fell following the Reuters report. If Russia keeps exporting wheat at a price which denies the US access to global markets, then the US wheat carry out will be huge. US farmers have also lost access to the Chinese soya markets for most of this year, so this season is one the US would rather move on from but will be hard to forget with the record carry out figures in both wheat and soya – and the financial impact it has on the farmers and their bankers!
China has only recently started buying US soya, but allegedly those 3 Mln T of purchases have gone into reserves rather than being released on to the market, which indicates that it was a politically motivated purchase and they are still going to the competition and cutting demand where it counts. This news pulled both US soya bean and maize prices down. It is thought that the only real way out for the US is now a smaller crop size next year. Brazil’s planting is almost complete and despite worries that any prolonged dry weather could affect the crop, the rain expected in the next few weeks should help ease worries. Add to this the expected 23% increase estimated in Brazil’s soya bean crop to a record 84 Mln T due to increased demand from China; and indications that Brazil is expecting its good fortune to continue.
At this time of year many people are busy with last minute shopping for the Christmas holidays. Parcels are arriving at every door and often get left outside where those aiming for Santa’s naughty list might just see an opportunity to grab a bargain and make off with something meant for you. After police said they were unable to investigate an ex-NASA engineer’s stolen package despite having security camera footage, his work began on a plan to deliver a life lesson that would be hard to forget. He designed a glitter bomb parcel containing 453g of glitter and a tube of `fart’ spray. When the parcel was moved the device used GPS to activate smart phone cameras to record the reaction. As the box was opened the glitter exploded and the fart spray was activated every 30 seconds.
Brought to you by Paul Poornan, Melanie Blake and Martin Humphrey.