Currencies

The £ has continued to find strength breaking through key resistance levels once again, exceeding 1.41 against $ and 1.16 against €.  The strength against $ has largely come from the additional fiscal stimulus being discussed to support the US economy and the inflation fears surrounding that.  The £ really rallied following the announcement of Boris’s roadmap the get the UK out of lockdown and back to ‘normal’ by 21st June, and that reverse on Friday, when Sterling weakened to `unchanged’.

Wheat

US wheat markets moved higher this week on the back of winter kill fears with harsh storms across the Midwest. 

The effect of the Russian export tax on the market is now also beginning to be felt with no real offers coming from that region as prices become uncompetitive.  The French Matif wheat market has pushed higher, partly following US markets, but also on the back of fresh buying from China post their New Year break.  They have reverted to sourcing French wheat over Australian, pushing the Matif back up to just €6 of its contract highs. 

Looking at the UK, AHDB revised their figures this week, reducing demand for wheat for the rest of old crop position, but this still leaves a gap of circa 200,000 tonnes which has not been sourced yet being required.  This means, that despite the reduction, Liffe will continue to track Matif prices to an extent.  The improvement in currency has meant that despite a rise in prices, Liffe is £12 off the highs compared with €6 for Matif. 

New crop UK wheat is holding that £40-45 discount to old crop with little to push it in either direction until we have more of an idea on crop emergence in the coming weeks. 

In industry news this week, we heard that the previously mothballed Vivergo Ethanol plant will be recommissioned in early 2022 to support the government’s new E10 fuel initiative.  The idea of this plant has always been to use the UK’s exportable surplus of wheat, but the economics only work when the wheat price is at a sensible level (lower than now, way lower).  Perhaps this is also a sign of an anticipated weaker forward market?

Soya

Soya seems to have found a bottom level again and is now beginning to bounce back off that, largely supported by the oil complex.  Soya oil is now close to an 8 year high in anticipation of increased demand later this year, as well as issues with crude production across America because of the winter storms. 

Brazil and Argentina remain dry which will aid the Brazilian harvest but is not such goof news for the still developing Argentinian crop.  China on their return have switched their attention to Brazilian beans, which does take the pressure off US old crop.  Argentina is still anticipating a record crop, and as it stands, Argentinian beans remain the cheapest on the market so perhaps a more favourable forward outlook, particularly if US farmers do get to plant the planned 90 million acres planned.   

And Finally…
Online bidder pays £18,000 for extremely rare £10 note printed in 1929

The rare Irish bank note which forms part of the Ploughman series which ceased to be valid in 1953, has not been seen for nearly a decade and is one of only 7 surviving notes that are known to be in existence. 

Auction House, Dix Noonan Webb in London estimated its value at between £22-26,000.  The notes were issued by the 8 banks in Ireland at the time and all featured the two work horses, meant to represent Irelands agricultural self-reliance of that period. 

Regards,
Kay Johnson & Martin Humphrey