Currencies

The £ continues its rally, albeit relatively modest, sitting at $1.36 and €1.20. This continues to run off the back off no new restrictions and increasingly shortening isolation periods.

Traders have been shorting the £ as currency was hit pre Christmas so now those positions need to be covered, this is also adding to its strength.  

Wheat

Global wheat has seen a slight uptick this week with the market spooked by potential escalations between Russia and Ukraine but also balancing itself after the sharp sell offs over the Christmas period. There is also high levels of demand for Q1 where consumers just could not face covering at the levels pre-Christmas, which will also lend some support to the markets.

The USDA report on Wednesday was bearish for wheat. Consumption was reduced around 1.8 MlnT, and stocks and carryover figures were increased. Australia and Argentina’s harvests are all but done now with quality rather than volume being the issue as thought. This could mean we see a situation where milling wheat markets continue to pull feed wheat markets up, despite the good volume of feed wheat available.

Looking ahead to new crop, the report upped production figures to 778.6 MlnT (against 20/21 production of 775 MlnT. The UK figures remain unchanged with the crop expected to be around 14.3 MlnT against a consumption figure of 15.3 MlnT. Having said that, we are part of a global market and as much as the UK could end up being net importers again, that does not mean prices will not move lower. We are going to be very much in a weather market for the next few months now but general sentiment is bullish to old crop and bearish new crop.

Soya

The USDA report for soya was largely seen as bullish, reducing production and end stocks although the market moved lower post report because the crop numbers projected are still good.

Brazil is estimated to be 139 MlnT and Argentina 46.5 MlnT. We are going to be very much in a weather market over the next 6-8 weeks as pods set and the market almost feels stuck in a range now waiting for confirmation on yield losses before committing to a solid trend.

Organic Markets

Nothing has changed in the organic markets this week. There are still no new offers for grain at origin.

Protein prices are stable at origin and with a sudden surge in growth for the Indian poultry industry on the back of Covid, there potentially be less exportable material available there. The Indian population are now looking to consume more poultry in the hope that a better protein diet will give them some defence against Covid.

And Finally…

Amateur Astronomers will be able to see asteroid next week as it passes earth at 43,000 miles per hour.

The asteroid, discovered in 2004 will pass the closest it has ever been to earth since 1933… 1.2 million miles away. This is close enough for it to be seen with amateur telescopes. Your chance to see is is on Tuesday at 21.51, after that it won’t be this close to earth until 2105.

Regards,
Kay Johnson & Martin Humphrey