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Weekly Commodity Report 25th August 2019


Wheat continues to drift downwards, having lost nearly £10 in the last 2 weeks.  The firming of the sterling restricted further UK exports.  The UK saw a slow week of trading, with little interest in spot wheat. 

China added tariffs to $75bn worth on more US origin goods, which caused a flurry of activity in the last half of Friday.  Agricultural goods are included on the list - including 10% on US wheat, maize and sorghum, which will come into effect on December 15th.  This only moved the price of US wheat back to unchanged, but will have an impact in the export world just at a time when UK wheat was already looking competitive to countries who never usually get to look as far afield as the UK as a serious supplier. 

The good dry weather of the last week provided an opportunity for those who had not managed to complete more of their harvesting before imminent rains.  AHDB estimated that UK winter barley is 98% complete with production up between 17-20%, rapeseed at 95% complete but with the smallest crop since 2004-05.  Wheat was only 31% complete, with results focused only in the south.  Currently yields look to be at the 5-year average of 8.5T/ha but this could all change as the crops in the north are harvested. 

EU wheat has also suffered price losses of 8% loss in August, driven by currency and global politics.  Adding to the effect of the USDA report, US weather offered resistance in the corn market as it moved lower again this week.  The drop in the US dollar and a sell off of long maize and short wheat helped provide a little support to wheat in the global markets.  The support seems to contradict the belief that the export demand will be lower.  China’s adding to the tariffs on agricultural grains and soya but adding 10% to tariffs on US beef and pork from the start of September there was a clear message that China is not backing down to the US.  Morocco is expected to take advantage of the US needing an output for its grain as its state buyers issued a tender to import 576kt of US soft wheat and 345kt of US durum wheat with a reduced tariff-rate quota.


The US pro farmer crop tour predicted corn yields would be lower than the already cut USDA forecast and last year.  The more concerning news, was that the normal soya bean pod count was restricted with some of the crop behind the stage needed to count, indicating its maturity is behind by weeks; meaning that yields will also be lower than the USDA forecasts.  This created a list of further questions despite the still large supplies:

  • Will yields be better and make up for the loss of acres? 

  • Will the leftover stock be lower as the 2018 crop was smaller than reported? 

  • What level is the outstanding orders at? 

  • What size will the next crop be? (especially in Brazil as China’s main new soya trading partner and given their stocks are low from the high demand they have had)

  • Are the US farmers who planted soya expecting Soya beans or are they planning on making the most of the Market Facilitation Program payment limiting the downside risk? 

China’s new tariffs on agricultural goods as part of the seemingly never-ending trade dispute had its biggest effects on Soya, as has often been the case.  Prices dropped 10 cents as an extra 5% tariff was added to this already struggling US crop.  POTUS followed with the suggestion that US companies use alternatives to Chinese manufacturing.

Police recently stopped a very strange looking vehicle on a UK motorway.  The vehicle was stopped by confused police in Bedfordshire.  Looking like a cross between a boat and a plane, with its nose painted white and quite a bit of gaffer tape, but is thought to be a motorbike. 

Police deemed the vehicle road worthy as it had a number plate, was taxed, insured, and had  working lights and brakes and had passed an MOT!  It was also keeping up with motorway speeds.  The driver and his shopping were there for set back on their way.  Multiple police forces tweeted about the vehicle and it has been getting mixed reactions.  But most feel you would have to be mad or very brave to speed down the motorway in this.  What do you think – do you fancy a spin in one?

Brought to you by Melanie Blake and Martin Humphrey