Currencies
Currency is unchanged week on the week, following news that the Bank of England will delay any interest rate rises until possibly 2026 which has raised questions over whether the market has been too optimistic in its expectations for the economies recovery in the later part of this year. Long term though, the view is still supportive for Sterling with a rise in the yields paid on UK government bonds a key indicator.
Wheat
Wheat markets have continued their downward trend this week as the fund money invested now look to exit their positions before they have to take possession of the contract at the conclusion.
As well as the fund money buy in, there have also been fundamental drivers this week:
France increased their carryout by 1.3 MlnT
China had a one day sale at auction of 142 Mln Bu of their national reserves - 56% of the available wheat for sale on that day!
Will China need to replace their wheat tonnage at some point or are there are bigger issues (that are not yet in the public domain) with their most recent swine flu outbreak?
Looking at the UK prices, they have followed the global pattern, but to a lesser extent, (earlier this week the Matiff dropped by €7 compared to just £1.50 on Liffe). This shows that there is still concern over the UK’s tight balance sheet. New crop has also not come off in the same way, supporting the theory that the current inverse (the fall from the high old crop prices to the lower new crop prices) we see on the market will begin to crumble, but perhaps more with the price of old crop dropping, whilst new crop continues to be supported. The thought is that old crop could find support as lockdown eases and demand rises from the hospitality sector. For new crop, the support is coming from the continued uncertainty around the size of the global new crop wheat tonnage.
Soya
Soya continues to trend lower as the availability of new crop Brazilian beans increases. Brazilian estimates are of a crop size of still around 134 MlnT which would be a record crop. However, this is partially offset by the downgrade in Argentina down to 44 MlnT. This suggests at some point the move downwards will slow or stop until more is known about the Argentinian harvest.
Organics
The organic market has been particularly volatile with various political and supply issues in India causing the protein markets to move up over £100 in a week! The old crop market on both grains and protein had already been tight meaning that material is now extremely difficult to buy.
And Finally…
Avid dancer, aged 99 vows to dance every day until her 100th birthday to raise money for the NHS
Dinkie Flowers has had an amazing life showcasing her dance talent across the world before making her TV debut at the age of 98 on the BBC’s The Greatest Dancer. After her professional career ended, she set up her own dance academy where she has taught for more than 50 years.
The grandmother of four has missed her classes since the pandemic began so has turned her attentions instead to fundraising pledging to work out 6 days a week until her 100th birthday on 7th May.
Regards,
Kay Johnson & Martin Humphrey
