Currencies
It would appear that 1,645 days after the UK referendum vote, we finally do have a deal! The £ has reacted positively as expected and opened up against both the $ and the €. The details will take time to come through (even after the introductory prologue of the 1264 page agreement!) but it does mean that the UK has avoided the worst of a trade turmoil after 31st December. Earlier in the week Sterling had hit a 4-week low with what was perceived as little progress so it shows just how sensitive currency has been to these negotiations.
Wheat
US markets have firmed this week, taking its lead from soya and an increase of 40% export demand from the previous four weeks. A portion of this has come from Brazil where milling wheat is in short supply and needed from alternative sources because of the continued strikes by workers in Argentina.
Last week Australia revised their harvest numbers further slightly up from the previous 31.5 MlnT reported in last week’s USDA report, but the confirmation that the Russian export quota will come into effect from 15th February with a tax of €25 per tonne cancelled out the good news from Australia.
Looking at the UK market, prices had been pushing up, particularly on old crop as concerns over a no deal Brexit increased. As we have said before, the UK needs to import an additional 1 MlnT of wheat between January and July next year which would be severely impacted if we did find ourselves in a situation of standard WTO tariffs. New crop has not rallied in the same way as old crop with news this week from AHDB that the wheat area for 2021 will be up 28% from this year.
Soya
Soya continues to rally with the difference between old and new crop beginning to widen. The strikes in Argentina are now causing significant delays in shipments with no apparent end in sight.
Workers are asking to be paid on the blue peso rate which would effectively mean then having an 80% pay increase! The weather across South America continues to look dry and there will be crop revisions needed in the new year. China have also now made noises about needing to source additional US beans in the early part of the year to plug the gap caused by the late Brazilian harvest.
And Finally…
New Year Good Luck Traditions From Around The World
With no exception, each one of us will be pleased to see the back of 2020 and although 2021 is likely to be starting back in lockdown, there is hope for 2021 with the vaccine programmes now starting to roll out. Whatever your situation, we could all do with a little good luck in 2021 so here are the top ways to generate luck from around the world!
Make a ‘Hoppin John’ dinner which is meant to bring luck and peace to those who eat it (USA).
Make a fish dish because fish only swim in one direction, forward (China).
Wear white to symbol a fresh start (Brazil).
Jump seven waves and make a wish for each one (Brazil).
Smash plates, the more shards made, the better luck you will have (Denmark).
Eat 12 grapes on the stroke of midnight, one for luck for each month of the year (Spain).
Kiss a loved one, whoever you kiss is your destiny for the year (UK).
Jump into the new year off a piece of high furniture (Denmark).
Take an empty suitcase and run around the block which is supposed to symbolise and year of travel and adventure (Colombia).
Smash a peppermint pig and eat a piece for good fortune (New York).
Open the front and back door to let the old year out and the new year in (UK).
Chose your underwear colour, yellow for luck, red for love and white for peace (Latin America).
Throw water out of the window to drive away evil spirits (Puerto Rico).
Buy a lucky charm at a Christmas market (Germany and Austria).
Save a wish in a jar to read the following new years eve (USA).
Regards,
Kay Johnson & Martin Humphrey
