Currency has remained an important factor Sterling has reached a 2 year low on news that a no-deal Brexit was more likely but has bounced a little way back to last week’s levels on reports a resulting recession would last 2 years rather than the 4 originally predicted.
The UK wheat price concluded the week trading at £146/t on the November contract. Generally, markets are hard to read and range bound due to the mix of news available at this critical step in the development of the soon to be harvested new crop, and there are numerous questions vexing the cereals trade:
How will the US maize crop do?
Has the Black Sea crop been affected by weather?
Nearer to home; what will the first wheat off the fields tell us?
UK barley is giving us our first indications, and these are seemingly good yields but with some variation in quality. Some cereal exports from the UK are being reported, indicating that all the maize imported in this last season has turned our wheat shortfall into a long. If the wheat crop imitates the barley for yield, we may well see a downward price pressure for the export market and potentially prices will have to drop to move the volume.
It has been recently reported that the Russian wheat harvest have been affected by the dry weather seen in May and June. Parts of the Volga region of Russia have reported an 8% drop in yields on grains harvested so far. It has been noticed that Russia has been offering less wheat for export, but this has been seen as a chance for them to take stock and quite literally build domestic stocks before resuming market dominance. The Ukraine reports better news with yields above the 5 year average at over 3.6T/ha.
Maize will continue to hold an impact on the global cereals market and with US maize yields still a source of uncertainty, it is one to keep a watch on. Reports have focussed on the phrase `better than expected’, but the expectation is for lower yields after the weather it endured during the crop’s development. With all thoughts on a new season, it is important with all US markets to reflect on the last season, and the end of season stocks it had at the start of the year.
It is rumoured that a deal is occurring between the US and China, but as this is such a long standing and volatile dispute there has been little effect on the markets. The trade has become tired of `hope and wants’ to be sure this time.
Official US reports confirming that the protein content of Brazilian soya beans is lower for the first time in 4 seasons was a big issue. Potentially this could affect the US trading relationship with China. It is reported that a top Chinese buyer has already bought alternative soya because of the lower quality. A small rally started in the soya bean price on this potentially season changing news.
African Swine Fever is still making the news, as China reports increases to biosecurity measures at pig farms and feed mills to try are slow the spread of the disease. The US soya bean market continues to be pressured by weather stories. Planalytics raised their soya bean yield estimate by 0.3 bushels per acre to 46.3 but this is still under the USDA figure of 48.5 bushels per acre. There are still many variables at play in the soya markets to develop a clear picture.
Many people like to relax with a good book, some like to learn something new and a few like to challenge themselves. If this is you I have found just the book and its title even mentions poultry.
Ducks, Newburyport by Lucy Ellmann is a 1000 page monologue novel written in just eight near endless sentences! Described as a stream of consciousness it is available for around £11.00. The sentences last over 100 pages each and have no paragraph breaks. Rather like a list of statements, separated by commas, with many repetitions of the phrase “the fact that”.
Despite a previous novel called Sweet Desserts winning a Guardian fiction prize Lucy’s work is often described as self-indulgent, bizarre and weird. Clearly, she was not put off by these remarks, and has more than embraced her trademark style with this book. It is a book about a mother’s love, loss and grief, despair at life today and of course; anxiety dreams about Donald Trump – we have all been there after reading some of these commodities reports!
It was described in one review as `pushing narrative to its limits’. But if you like we could give it a go. Next week’s commodities report in one sentence?
Lets start! The fact that….
Brought to you by Melanie Blake and Martin Humphrey
