Currencies
Currency continues to look volatile and closely linked to Covid and the stories that generates. Overall, the £ has continued to look positive and with early data from the ‘glorious 12th’ looking strong in terms of consumer spending, we have seen levels back pushing that 1.40 value. The next few months are going to continue to be a volatile time with infection rates, economic data and vaccine progress all remaining the key drivers.
Wheat
Grain prices are now very much in a full-blown weather market! North America, Canada and Europe continue to look cold and dry with no rain in the forecast, with Russia having the opposite issue and looking too wet. This caused markets to move limit up on grains during this last week, with news that China had bought a further 500,000T of old crop French wheat just helping to push the market higher. Corn prices are now at a level where they are being forced out of diets, and China is actively looking to replace tonnage with wheat again.
One very key area to watch over the coming weeks will be the escalating tensions between Russia and Ukraine. Russia has threatened to close off the Kerch Straight which links the Black Sea to the rest of the world, to any non Russian flag bearing vessels. If they did this then that could potentially block some of the cheapest wheat for consumers. Interestingly that this comes at a time when Russian wheat crops have been upgraded to circa 81.4 MlnT, vs 77.5 MlnT for 2020.
Looking closer to home, the UK market has of course taken its lead from the rest of the worlds market with old crop moving up £3 and new crop up £6.50 on the day where US markets hit their limit up maximums. With little rain in the forecast there are concerns, especially as our current new crop prices are still cheaper than Europe’s so unless we have a crop with a clear exportable surplus, we cannot assume harvest will mean prices come lower. We can expect more volatility ahead, until the weather market has run its course.
Soya
Soya prices have partially followed the grain markets this week, to a degree and with corn prices so high, the corn/soya ratio which US farmers follow so closely, still falls in favour of corn. This means there is unlikely to be a late surge in US acreage to get back to that 90 Mln Acres which the trade had hoped for pre USDA report.
Data this week from China showed that pig feed production was up 28% in the month which contradicts other reports that say up to 20% of Northern China’s hog herds have had to be slaughtered for African Swine Fever so that is not helping give the market any true pictures to give direction. US plantings are going well with rain in the right areas but Argentinian harvest is still very slow with 19% completed vs 56% average which will keep the bullish sentiment to the market for the time being.
And Finally…
Don’t Miss The Pink Super Moon!
The ‘pink moon’ which will glow a goldish colour is expected to peak at 11.32pm on Monday 26th April and appear 30% brighter and 14% larger than typically seen. There will be a second chance to see what is know as the Flower Moon on 26th May. The phenomenon got its name because it typically occurs around the time of the first spring blooms.
There will also be a meteor shower that evening with around 18 shooting stars which will be able to be clearly seen across the Northern Hemisphere if you can get somewhere with no light pollution!
Regards,
Kay Johnson & Martin Humphrey
