Currencies

The £ has seen very little movement in the past week despite the disappointment that March’s inflation figures failed to drop back below 10% as had been anticipated but it did still show a small drop from 10.4% down to 10.1%, which is at least in the right direction!

Wheat

Wheat continues to move lower with new crop wheat now being offered at sub £200 for the first time in over a year! Most of this downward movement continues to be the old crop story. Globally there is still a huge volume of wheat available which needs to find homes before harvest. Helping keep the market that bit lower is the positive news that rains in the US are now helping those delayed winter crops after the prolonged cold period and the collapse of maize premiums in the past week.

Typically maize has been trading at a premium of circa $60 over Chicago futures but that dropped down to $10 this week with plantings now progressing well in the US and the volume from Brazil now finding its way onto the market.

There are bullish watch points which could have a bigger impact once the old crop story is done and potentially we start looking at a tighter wheat picture. If Russia and Ukraine both plant less this season as expected, that will eventually catch up and impact stocks whereas this year, because of the excess elsewhere we haven’t seen that.

Other points to watch are the wet UK weather which is delaying spring drilling but also will begin to negate that good start winter plantings had if we don’t see some sun and heat soon!

Looking at the wider geo political issues, the G7 are looking at changing the way export bans to Russia are being managed by making it a blanket ban with products by exception but Russia has fired back if this were to happen that they would close the grain corridor. Hungry, Slovakia and Bulgaria are still making noises around potentially banking cheap Ukraine imports in order to protect their won markets as well.

At the moment, the term, ‘the trend is your friend’ has proven right but it feels like we are at a point now where decisions on longer term cover need to be made or an opportunity could well be missed.

Soya

Soya prices are off around £20 in the week this week, again with the planting progress in the US and the Brazilian material finding its way into markets. There has been no real demand from China after their pledge to reduce soya in animal feed by 2025 so with a potential huge US crop looming, soya feels bearish long term at the moment.

Organic

Organic prices appear to have found a level at the moment which is generating new crop trade and origins are likely to be Romania and Kazakhstan this coming season.

In terms of proteins, we have seen the first example of shippers no longer carrying strategic stock and the UK effectively has run out of organic sunflower awaiting new shipments. This is temporarily driving feed prices back higher and shows as we have said before, the benefit of contracting for a 6 month period to protect from these short term supply issues.

India soya suppliers are in the process of re registering for their organic status after the EU removed all bodies from their approved organic suppliers, which meant the UK followed suit. This is likely to be August/September before we know if any are successful which means it is more than likely soya supply will switch to Chinese certainly in the short term. This means lower quality protein which could bring in some other alternative protein sources into organic diets in order to be able to balance that.

And Finally…

Will AI take over?

You can barely turn the news on without notification that AI is being used in a new or different area of our lives. Students appear to taken to the benefits of ChatGPT, but the extent of its use surprised many, when a survey, announced this week of 400 Cambridge University Students showed that 47% admitted to using it!

But were they honest about it? Boris Edagsen was honest about his use of AI. Boris (on the left in the picture) produced a haunting image of two women, and called it Pseudomnesia: The Electrician using AI technologies.

He learnt how to handle the technology, and submitted the end result (on the right) to the annual Sony World Photography Awards (SWPA).

When the photograph one, Boris went public to explain how AI was used, and to encourage debate on the usage of the technology. Boris went public by refusing the aware, with the following statement "We, the photo world, need an open discussion. A discussion about we want to consider photography and what not. Is the umbrella of photography large enough to invite AI images to enter – or would this be a mistake? With my refusal of the award I hope to speed up this debate."

It is a debate which is likely to be discussed, yet unresolved for many years, or will we be headed towards a Terminator style oblivion as shown in The New Yorker recently:

Regards,

Kay Johnson & Martin Humphrey