Currencies
Very little has changed this week with weakness being felt across the board for all currencies given the ongoing uncertainty over Omicron lockdowns and for the UK, the continued NI and French Brexit talks.
The new measures announced on Wednesday evening did not seem to have any impact on the £ against either the $ or the € but the market had really already anticipated restrictions of some sort so those were priced in.
Wheat
Wheat has seen a relatively quiet week compared to the recent volatility seen. Post the funds sell off on the back of demand concerns if Covid restrictions tighten globally over the winter, the market tried but failed to rally ahead of the USDA report on Thursday evening. It meant for the May futures we were bouncing between resistance at £235 and support around £228, quite a narrow gap compared to recent price moves.
Matiff dropped around €18 ahead of the report this week, compared with just £8 on Liffe. We have been saying for a while now that UK wheat is still ‘cheap’ compared to Europe and this price move goes to support that. Russian supply still has large questions hanging over it with the introduction of an $85 export tax this month and talks of a quote for February through to June next year, although no figures have been put to that as yet.
The USDA report itself did slightly increase wheat end stocks but left corn and soya numbers unchanged. December is traditionally a quiet report, waiting for January export figures to make any real adjustments.
Soya
Soya prices have seen some nearby support on Chicago, following the rally in veg oil markets. These saw large sell offs over the past 10 days with questions over demand again but this in turn, created a buying opportunity which rallied prices again.
The long term prosects for soya still look bearish with plantings having gone extremely well across South America and rain arriving at the right time over last weekend. This has put crops at 88% good/excellent, well ahead of the average, and moisture levels are 98% in the favourable range.
Organic Markets
Organic grain markets have made another move higher which feels almost beyond belief! This is still on the back of no new offers at origin and the on going tightness in freight.
For proteins, to add to the questions over supply from India and these smaller decertified bodies, we now have supply issues from China to deal with. For Q2 onwards, Chinese material is pricing better than Indian origin, however, because of localised Covid lockdowns, we have a situation where boats are waiting to be loaded and there is no material to load them with because it is stuck in factories within the lockdown zones!
And Finally…
Regards,
Kay Johnson & Martin Humphrey
