Currencies

The £ has seen some additional strength against the € this week with lockdowns and the associated unrest which that has subsequently caused. The ongoing Northern Ireland trade talks will keep the £ capped though for the time being and against the $, we are at the same level as a week ago.

Wheat

The wheat markets have broken new records this week which is a sentence which no feed manufacturer wants to write!

The Australian harvest had been the shining light which could help ease market pressures, albeit with delays due to global freight shortages. This week however, the persistent rain continues to hamper harvest and there will inevitably now be quality issues. Import heavy countries such as Algeria and China have been buying heavily this week and it now looks certain that Russia will bring in some form of export cap from January but to what extent, we do not yet know.

These factors meant that May futures broke well clear of their resistance level of £236 and hit highs of £246 before closing down at £239. The market has moved back yesterday with the US markets closed but it is too early to say if this is the start of a small correction or just a one off.

Looking ahead though, winter wheat acreage in the UK is up and this is mirrored across the Northern Hemisphere, but, with high fertiliser and ag chems costs, if there is a reduction of application in these areas, then we could see lower yields.

Soya

Soya has moved back a bit this week from the highs it saw after funds heavily bought in. There is still the question hovering that if the crop fundamentals remain positive, then these fund holders are likely to dump and this could give us large swings in the coming months.

Brazil are 86% planted vs 77% average but there is still talk of La Nina for early next year which will need to be monitored closely.

Organic Markets

Organic grain markets continue to maintain their high prices, largely driven by shippers being unable to book forward freight and therefore, unable to cost this into prices. Current indications on container raw materials is that circa $350 for every tonne is to cover freight costs, whereas in a normal market you would be looking somewhere closer to $50.

 In terms of physical raw materials, grain offers are tight and it is hard to gauge what there is still to sell at origin because the continuing rising prices is not encouraging offers. For proteins we now have the concern about the Indian organic certifiers being at risk of being decertified. This may well impact material which is either already in transit to the UK or even already in UK stores. If this does go through, it could significantly short the market in the nearby.

And Finally…

Have you made your Christmas cakes yet?

The tradition of Christmas cakes dates back to the Georgian era and were referred to as ‘twelfth cakes’. That was because you would traditionally make 12 small cakes to enjoy over the twelve days of Christmas which traditionally ended on 5th January. As the Industrial Revolution really came into force, people shortened their period of celebration to Christmas and Boxing day so the cakes became larger and re named Christmas cakes.

The cakes began as a plum porridge type mix and slowly became more cake like. The addition of royal icing came later and was seen as a status and wealth symbol to show how much access you had to sugar. Traditionally and pea or a bean would be baked into the cakes in the early days and whoever found it in their slice became King or Queen of the Twelfth nigh party. Later in Christmas cake, it became more of a tradition to add alcohol to the cake and this then really made it a favourite with Victorian upper class women!

Regards,
Kay Johnson & Martin Humphrey