Currencies

The £ found continued to find strength this week and broke through the 1.40 level against the $ and 1.15 against the €. This has been driven by the continued optimism that our economic situation will continue to recover faster than other countries, as the UK reached the significant milestone of 15 million vaccine doses administered and we are due to hear, certainly in part, our route out of lockdown on 22nd February.

Wheat

Wheat markets in general were quiet this week with no real fresh news to continued ‘feeding the bull’, particularly as China are absent from the market for their New Year celebrations.

There has been some support to Matif markets caused by the drop in temperature in Northern Europe and the lack of protective snow cover in some areas. This has supported UK prices albeit at a marginal level because of the continued strengthening currency. The UK has seen a drop in demand for flour products during this lockdown but we will still need to import somewhere between 500,000 and 1 Mlnt worth of wheat to see us through to harvest so old crop prices will remain at import parity.

New crop prices have seen some support this week from the Russian export tax. The imposition of their floating new crop tax with still little detail about it has meant new crop offers from that region have dried up. Historically, Russia have been the biggest global exporter of wheat for that July- September period. In the UK we are still waiting on a clearer picture on new crop emergence, as we head into the spring months but there remains that £40 discount between old and new crop which needs to be bridged at some point.

Soya

Soya had a quieter week after last week’s strong rally and correction pre and post USDA report. The weather situation in South America has remained unchanged with a lack of rain and soil moisture in Argentina and wet weather in Brazil slowing harvest. Latest data puts their harvest at around 22% complete compared with the average figure of 58% by this time of year.

US farmers have reportedly planted 90 million acres of soya beans, encouraged by the high prices which is the biggest area since 2017, which be more bearish to forward prices. With the uncertainty over the South American production figures this year though, that potential large US crop is very much needed to balance S&D.

And Finally…
NASAs $2.2 billion Perseverance Mars Rover lands to begin 2 year mission.

NASA’s latest Mars Perseverance Rover landed safely after its 239 million mile journey during a terrifying 7 minute radio silence where it entered the planet’s atmosphere and plotted its own safe landing. The elation of mission control could clearly be seen with comments that they now ‘had a job to do’ as the rover begins its two-year mission. Within minutes of landing, it had sent back the first images of the red planet proving that 19 cameras on board the Rover had also survived entering the planet’s atmosphere.

Perseverance will search for biosignatures (signs of previous or present life) in an area believed to be an extinct lake. It will also collect rock samples from across the planet which will be collected by a separate returning mission in 2026, the first of its kind.

Perseverance is accompanied by Ingenuity, a small helicopter like robot which will fly around 100,000 feet above the surface and survey geological data in the areas the rover is unable to travel.

The traditional lucky jar of peanuts could clearly be seen in mission control which is always seen as an omen for a successful mission since having them present broke a string of 7 failed missions back in 1964.

Regards,
Kay Johnson & Martin Humphrey