Currencies
We have started the new year slightly weaker on currency than we ended although this seems to be more down to $ strength than £ weakness.
With spec money starting the new year with ‘squared positions’ they are looking for a nice gentle entry point for the new year and as the $ was the best performing currency last year, it makes sense that they seem to have swayed towards that.
Wheat
Market rallied between the Christmas and New Year break but this appears to have been month end profit taking as there was very little volume traded and since opening this week, market have all but given back that gain.
Interesting during the course of the past 12 months, May futures has traded between a low of £195, a high of £357 and ended back at £251 meaning that technically we are back on the lower side of the range but, we know that the high seen in May was an unprecedented event driven by the fear over supply chains in Ukraine. Ukraine continues to surprise having exported their second highest volume of the season last month, 4.2 MLnT, all with the use of generators after a further bombing campaign by Russians across the region during the month.
Fundamentally though the S&D figures globally still look more than adequate despite the concern over Argentinian dryness. Australia are happily filling supply chains across China and Asia and Ukrainian material is still featuring across Northern Europe.
In terms of the UK this does cause an issue in terms of export. We are €10-15 too expensive to feature and so far this season have only exported 650,000 tonnes, leaving a further 1.5 MLnT to do during January to June which is unlikely. This will leave us with a record carryout, potentially leading into another good year. As much as this seems positive news, this makes buying and trading this market extremely difficult. Looking purely at crop fundamentals, the markets are very much on a downward trend but the wider geo political issues are still likely to cause nasty rises at times.
Soya
Soya saw extremely sharp rises over the Christmas break but this appears to be fund money hedging their bets while markets were closed against the dryness in Argentina, making them long of contracts for the first time in many months.
Since the open though we have already seen prices come off £20 at the time of writing with Argentina still projecting a crop of circa 151 MlnT vs last years 125 MlnT. The WASDE report due next week will give us a clearer picture.
Organic
Organic prices seem to have found a level now albeit, not really trading. Again, shippers and compounders have huge stocks because of the downturn in organics which we have already seen in volume which is making pricing almost a paper exercise. The caveat to prices moving lower is that material in the stores carries a cost and there will be a limit to how low shippers are prepared to go to move stock before it makes more sense to hold it.
And Finally…
Had enough of Christmas leftovers? Try this….
Most people will have finished the Christmas turkey some time ago, whether it be the cold meal, or a turkey curry, but how edible are those other Christmas items?
Take the Christmas tree – it is probably sitting outside your house, after 12th night, and you might be wondering if you can take it to the tip yet?
But did you consider eating the Christmas tree?
Rene Redzepi, the Head Chef of the 3 star Michelin restaurant Noma, in Copenhagen, told the Observer that pine needles had been used in his food for 20 years. He said: “Think of it as rosemary – you can use it in just about anything.”
John Williams, the executive chef of the Ritz restaurant, described the pines as “fragrant and spicy”, and useful to enhance the flavour of celeriac.
Julia Georgallis, who is a baker and wrote ‘How to Eat Your Christmas Tree’, said: “You can pretty much eat the whole thing. You can use the needles as you would rosemary or bay leaves, for flavour.”
And the benefits of eating those pine needles? They are a good source of Vitamin C, and can be used in anything from ice creams to gins, or even to pickle eggs.
Just remember, this only works with real Christmas Trees, the synthetic one will just have to go back in the loft for another year.
Regards,
Kay Johnson & Martin Humphrey
