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Weekly Commodity Report 6th May 2019

UK feed wheat finished the week on a (relatively) big move downward.  Despite some firming in the US markets and the week showing little more than sideways movement, Friday saw a tumble in prices.


The May 19 contract most affected, sliding over £3.50 to end the week at £156.20.  The November contract was down by £2 on Friday and £3.50 on the week trading below £143.75 – the low for the contract.  The day’s trading saw a significant number of open interests and a much higher volume of offers compared to bids suggesting that this could be a renewed move lower.  However, currently, the prices recorded on the futures markets remain largely disconnected to those expected at the farm gate, possibly due to further forecasts of dry weather, which could affect harvested yields.

ADHB cereal usage data showed a 10% drop on March UK milling wheat use year on year, citing the closure of the bioethanol plant a major influence.  Animal feed production was also down in March for all species year on year, with the contrast between the recent weather and the `beast from the east’ storms of a year ago affecting feed needs.  Over the last year there has also been an increased use of imported maize in animal feed, and 8.8% increase in barley used in brewing and related industries both due to competitive pricing and march year on year has been a reminder of just how different a new season can be.  Currency is always an important factor as sterling moved up against both the dollar and euro.  Brexit remains a potential source of volatility, but with the deadline further extended and talks described as deadlocked in the press at least for now it has been stable.  Concern in the trade remains, a lack of decisions on Brexit drives the same lack of decisions in the commodity markets. 

The USDA is expected to produce its first official estimates for supply and demand to include 2019/20 on May 10th.  It is expected that US wheat acres will be higher than last year.  Exports will be a key factor, so a trade deal with China and competition with Russia will remain key factors.  The trade clearly think this could be a challenge, as there is a net short (sold) position in Chicago wheat futures due to concerns for the world economy and expectations world 2019 wheat supply will be high in both Europe and Russia.  Early estimates place the world wheat crop around 773 Mln T, compared to 733 last year.  Maize prices in the US remain under pressure despite wet spring weather potentially reducing the final acres figure due to the huge expected carry and lack of a firm deal between China and the US.


The lack of trade deal continues to affect Soya markets.  It is thought that despite positive signals from China some in the US government do expect further concessions from China and much firmer enforcement of key issues.  The South American weather continues to benefit crops, so production figures are expected to be above last year, so the soya markets remain under pressure from both sides.  The possible reduction in Maize acres in the US suggests that farmers are likely to plant Soya beans, and the expectation that the 2019 world soya bean supply will be higher than demand, the US will need China to buy large quantities of soya beans this year – once the trade deal is resolved.  The recent Chinese demand has been sourced from Brazil and Argentina, where soya bean and meal prices are currently at a discount to the US prices (and dropping) there are few positive indications for higher US prices at this time.

When you think of dinosaurs you automatically think of big dinosaurs.  Think Tyrannosaurus Rex and you will recall a Dinosaur feared by most other dinosaurs.  But a fossil found 20 years ago is proving every family has some unexpected connections. 

This T-rex relative, now named Suskityrannus hazelae, stood just 3 foot tall at the hip and was only marginally longer than the skull of a T-rex in its entirety!  It is thought it weighed just 20 – 40 kilos compared to the 9 tonnes of a full grown T-rex.

The `mini me’ T-rex dates back to the Cretaceous Period 92 million years ago.  A time shared with some of the largest dinosaurs that ever lived.  It is thought that for this reason it had a more slender skull and elongated foot adapted for speed to get out of the way, unlike the T-rex who did not need to worry about moving fast. 

Despite this, just like its larger relative, it was likely to have been a meat-eater feared by smaller animals as a skilled killer. 

This tiny dinosaur was discovered in New Mexico in 1998 by Dr Nesbitt, who was then just 16 and on a school trip.  Discovering a link into the evolution of what came before one of earth’s all time apex predators sounds more exciting than any of my old school trips.

Brought to you by Melanie Blake and Martin Humphrey.