Currencies

Very little has changed with currency this week, the lockdown and the UK’s vaccine programme roll out, are contributing to keeping the £ range bound against both the $ and €.  There are signs that the £ is starting to test the $1.37 level with previous resistance levels now becoming support levels this week.  The $ had continued to struggle with the issues in America over Trumps last few weeks in the White House and concern over potential unrest during Biden’s inauguration. 

Wheat

The USDA report this week pushed markets into double digit overnight gains.  Wheat found support from the cut in the Argentinian wheat crop of 17.5 MlnT due to ongoing drought, however it also found support from the overspill from corn.  The report cut corn production from 49 to 47.5 MlnT, as expected, but it also increased Chinese demand and in a surprise move, cut US production.  This caused markets to react strongly and US wheat closed $30 up in a day and corn up $25 - significant

Russia have announced this week that they are exploring the idea of increasing their export tarrifs on wheat from $25 to $50/T, making their material uncompetitive and therefore drying up any offers out of that region which has pushed un Matif wheat prices.  Europe are already tight with a top heavy export pace.  We know that globally, there are sufficient wheat stocks, but they are not necessarily in the correct place/cotinent.  China are looking to France to source their wheat instead of Australia, due to the fallout over the Australian Prime Minister’s comments that `China is to blame for the pandemic’.  This means that the already tight European stock sheet is now looking tighter still, and it will take time, possibly not until Q2, for them to be able to have access to the surplus wheat which Australia has.

UK wheat is still following global markets higher, but is still cheaper than Matif by around £7-10/T, so could easily move higher yet.  Although we have no tariffs post Brexit, we are still heavily reliant on imports from a tight market.  Reports this week suggested that the EU/UK closing stocks could be at the lowest levels since 1983/1984.

Soya

Soya continues to rally strongly, again over dryness in South America and an ever increasingly tight carryout figure for US old crop.  The USDA report downgraded the Argentinian crop from 50 MlnT to 48 MlnT but did not cut Brazilian figures as expected.  The market had anticipated this to be cut from 131 MlnT to 131.4 MlnT.  The Brazilian harvest is now underway, but due the weather affecte planting delays, this is currently at 10% vs the usual 25% for this time of year. 

And Finally…
A 200 year old biscuit baked in honour of conjoined twins known as the ‘Biddenden Maids’ is set to sell at auction.

The biscuit was baked in honour of Mary and Eliza Chulhurst who were born in the village of Biddenden, Kent in 1100 and lived until the age of 34.

The sisters are reputed to have bequeathed land to the village, known as the `Bread and Cheese Lands’, the rent from which was used to feed the poor in the village at Easter.  Since at least 1775, Biddenden Cakes have been made in the village bearing the effigy of the twins. 

This is not the first time a biscuit has been sold at auction.  Two years ago an 18th Century gingerbread biscuit sold for £3,200.

Regards,
Kay Johnson & Martin Humphrey