November wheat futures remain volatile trading at about £181.50/t.  Between 29th June and now we have seen prices from £160/t to move up £35/t by 7th August to the month’s peak of £195.50/t, the highest value since April 2013.  The drop seen in prices last week was short lived as news of Russian agriculture minister meeting grain exporters at the start of September grew rumours that some export curbing action is more likely. 

In terms of the UK Supply & Demand, the general consensus seems to be that the UK will produce 13.7 Mln T wheat (15.2 Mln T last year) and that the high prices are assisting in rationing demand.

Vivergo is said to be shutting down at the end of September for maintenance; which has absolutely nothing to do with the 30% rally in wheat prices versus the 9% increase in ethanol prices in the past eight months.  Ensus is allegedly reported to have said that wheat prices are too high, implying that it will switch to maize, thus domestic wheat consumption will probably fall to 15 Mln T, and after allowing for Opening and Closing stocks suggests that the UK will need to import 1.8 Mln T wheat this year.  If the 1 Mln T of imported maize replaces feed wheat, then the UK only needs to import another 0.8 Mln T which may well be milling wheat, thus balance may have already been achieved.

Last week UK prices moved to a more normal €4/T discount to the Matif an indication that the UK wheat market is beginning to settle, relative to international prices, at least for the moment. 

News that a Brexit deal could be more likely to be achieved, has firmed the sterling against both the Euro helping a little with competitiveness for trade.  The EU and US markets have shown similar patterns to the UK market.  The EU continues to export little as expected.  Russia sold wheat to Egypt and has 1 Mln T offered at the tender showing exporters are keen to take advantage of the world market while they can with the weak ruble encouraging selling towards exports. 

The August USDA report has widely been dismissed by Europe as a work of fiction.  Whilst the yields for US maize and soya ring true (a bumper US harvest), the non-US wheat numbers were presumably politically designed not to alarm the rest of the world.  This is leading to a split opinion amongst buyers; some believing that we have seen the top of this rally, whilst others believe that insufficient rationing has yet taken place and there will be more (higher) priced rationing to come.

Soya bean meal prices have been extremely volatile, trading at about £310-330/T ex-port for the past few weeks, partly due to volatile Chicago markets and partly due to currency.  The USDA report estimated a US soya yield of 51.6 bushels/acre compared with the market estimate of 49.6 bushels/acre, which increased US soya production by 7 Mln T to 125 Mln T, and increased ending stocks by 5 Mln T to 21 Mln T.  World soya production for the forthcoming year was put at a record 367 Mln T (337 Mln T last year), with a record carry-out of 106 Mln T.  Trade disputes continue to dominate the news and affect global markets. 

The USA is at ‘war’ with both China and Russia and Saudi Arabia is at ‘war’ with Canada over human rights.  Trade wars often have unintended consequences, thus China and Russia getting together for military exercises; the enemy of my enemy is my friend? Currently the US, having fallen out with all its traditional export markets and with increased yields, is finding the price of both US maize and soya in the doldrums.  Chinese imports estimates were further lowered to as little as 86 Mln T for 2018/19 (96 Mln T 2017/18).  With the Chinese government suggesting that this was possible with the use of other protein sources and that if its use is below 90 Mln T further US bean imports were not required.  This is in the face of a further $200 billion set to be imposed by the US on Chinese goods next week. 

It is always nice to do a good deed but the recipient may not seem as grateful as you had hoped.  In a recent comedy scene a London fire brigade attempted to save a blue and gold macaw parrot from a roof.  After 3 days and several failed attempts to tempt the parrot down by both the RSPCA and its owner it was feared the parrot was sick or injured.  Fire fighters were called and following instructions, one brave fire fighter climbed to the roof to befriend the stricken bird by saying the words he was told to say: ‘I love you’.

Despite sniggers from his team, it seemed the feeling was mutual as Jessie repeated the phrase and hopes were high that this bond would see her in his arms and safe.  Taking advantage of this smart bird’s multilingual ability they asked her in English, Turkish and Greek to ‘come’.  Much to everyone’s amusement Jessie demonstrated another of her language skills by swearing – a lot!  Lucky for her unlike the famous parrot in Monty Python’s Dead Parrot sketch she really was just resting.  She flew to another roof, then a tree and back into the safety of her home.  With her Diva like behaviour and extensive language skills Jessie could be as famous as Monty Python one day but we hope she lives a long happy life.