Currencies
The £ has seen a decent rally by recent standards over the Christmas period, sitting at $1.35 and €1.20.
This has been put down to a combination of good manufacturing data for December and the confirmation that there will be no further restrictions or lockdowns to tackle Omicron in the UK.
Wheat
Globally wheat prices have all started the New Year lower. Over the Christmas period, Chicago closed down around $16, Matif €14 and Liffe initially around £7, although that has moved further now as the week continues.
A portion of this will be down to traditional year end profit taking but as we have mentioned before, there is a huge amount of spec money tied up in Agricultural commodities at the moment, and this is an example of what can happen if they decide to move their money out in any great volume.
Fundamentally, nothing has really changed. There has been concerns over a drop in demand because of Covid lockdowns but it feels like that story is running out of steam now. Technically we are now looking at £219 as the next level of importance on May futures. If we break that value, then we could drop further down closer to £200. Current values are sitting at £215.
Looking ahead, there has been dry weather reported in the North America and across Russia and Ukraine which could hamper the winter planted crops but it is still very early on. In the UK, the planted wheat areas is expected to be around 1.81 million hectares for 2022, 1.3% up on last year. The only stumbling block there is the high input costs such as fertiliser, which if cut back on, could mean we do not see the large yields needed to back fill pipelines.
Soya
Soya on the other hand has seen a period of strong rallies over dryness concerns in South America. The yields across Brazil will be set in the next 6-8 weeks but in the last few days, with rain arriving, the market has begun to move lower.
Markets are quiet at the moment with not much trade happening. Even with the threat of dry weather, with Brazil estimating their crop to be circa 138 MlnT and Argentina 45 MlnT, there is still wiggle room for these to be reduced and provide a record crop.
Organic Markets
Nothing has changed in the organic markets this week. There are still no new offers for grain at origin.
Protein prices are stable at origin and with a sudden surge in growth for the Indian poultry industry on the back of Covid, there potentially be less exportable material available there. The Indian population are now looking to consume more poultry in the hope that a better protein diet will give them some defence against Covid.
And Finally…
Farmer gives cows VR goggles to make them think they are outside and produce more milk!
A Turkish farmer who has bought this cows in for the winter is showing his herd images of green pastures in a bit to keep his cows calmer and therfore produce more milk.
He initally trialed it on two of his cattle and found in increased their milk from 22 to 27 litres per day.
The headsets were developed by a team of farmers, developers and vets in Moscow, moulding them to the animals head. The farmer, who has also trailed classical music on his farm, has now ordered further headsets
Regards,
Kay Johnson & Martin Humphrey
