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Weekly Commodity Report 8th March 2019

The May 19 wheat contract continued to slowly fall this week, reaching lows not seen since May last year and is ended the week at £159.55 despite a day of little change on Friday.  We continue to see the link with the Matif May 19 contract which also grinds lower. 


Old crop wheat demand is still muted by the ongoing use of maize by some compounders. Stocks of maize and barley are relatively high in stores and their comparatively lower prices still weigh on the wheat market.  The split between old and new crop remains high at over £20, but it remains to be seen from which side this gap will be closed from, as the season concludes.  The UK and Europe remain tied to the vagaries of the Brexit debate and as time runs short for a deal, many focus on the `ifs’ and `maybes’ of the future of any deal rather than traditional market drivers.  Currency has been range bound but remains a volatile factor as Brexit approaches.

The US market showed some volatility on the release of the latest USDA stats, but overall the report was taken as `neutral’ by the trade and returned to pre report levels quickly.  The US wheat and maize stock levels were adjusted up alongside a not unexpected increase in both world wheat and soya bean carryout.  The Russian wheat export level continues to drop to a 14 week low in line with the global market.  The USDA also indicated that the US was cutting its hopes for share of the wheat export market as it reduced its own expected exports and lifted the level for the EU.  At least for the remains of this season the EU will hope to hold on to some of the export market.  Currently EU wheat is probably at its most competitive against Russia for wheat exports since 2016.  Overall the report indicates that the world economy is slowing.  The world wheat production figure was adjusted down by 1.7 million tonnes but this is unlikely to be seen as a problem with high maize carryout expected. 


Soya price remains driven by the news of trade between the US and China.  Both soya bean and soya bean meal are weak, due to the lack of a definite date for meeting between President Trump and Xi Jinping, and both sides reporting that an agreement to the trade deal remains unlikely to happen imminently. 

A small decrease of 1 million acres of US soyabean planted acres is likely to be offset by increased production in Argentina and Brazil following the increased demand for Chinese Soya bean imports.  The USDA also reported an increase of the soya bean carryout, which higher than trade average expectations.  The US export sales report showed an 18% decline on last year leaving the season total at just 39 million tonnes.  Add a strong US $ and pressure was high on the soya bean market price. 

African Swine Fever continues to spread in China reducing live pig numbers and so further reducing demand for soya bean in this already unusual year.

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Last week was all about pancakes.  In Ashboune, Derbyshire it was all about the Royal Shrovetide Medieval football game, which is usually held over two days every year; Shrove Tuesday and Ash Wednesday, between the hours of 2 and 10pm.  Hundreds of players make up teams called the Up’ards and the Down’ards and battle to move the ball, mostly with hand taps not kicks, to stone plinths 3 miles apart.  Your team is chosen by what side of the Henmore brook you were born on. 

Although it has taken place since the 17th century, Edward VIII started the game in 1928 by throwing in the ball gaining the game its royal status. 

There are almost no rules and the pitch has few limits.  The ball is even filled with cork in case the game spreads to the river. 

For a change; instead of burning pancakes next year why not join this historic event.  Alternatively just make sure you are not driving to Ashbourne on these days.

Brought to you by Melanie Blake and Martin Humphrey.