Currencies
On the positive news that the UK looks to fully re open from 19th July, we did see levels come back stronger, although still very much in the lower end of the range which we have seen, 1.38 against $ and 1.16 against €. The obvious optimism you would have expected from the announcement has been met with some concerns that a ‘big bang’ reopening could put the UK at risk of a third wave which could then bring back tighter restrictions. Let’s hope the 10 million pints expected to be drunk during Sunday’s final help boost spending enough to counter that!
Wheat
Grain markets started the week higher following the bullish USDA acreage report but have ended the week moving back lower on continued better weather prospects. This coupled with news that the EU estimated crop figures are approaching record numbers has given the market an easier feel although we do need to watch the corn figures which have been driving most of the agricultural commodity markets because the lower US acreage and small SA crop could push more demand onto wheat which would then lend support in its own right to the wheat markets.
Late rain across France and Ukraine this week has meant that there are now concerns that some of the premium milling wheat would be downgraded to feed wheat. This at a time where the surplus Australian volume from last season is more than fulfilling the requirements east of the globe so excess feed wheat is likely to be pushed further west. If you look at current UK estimates of 15.4 MlnT, this would give us a small exportable surplus and currently, our UK wheat prices are too expensive for some of our traditional export homes such as Denmark. The added competition from Europe would suggest that prices at harvest could move lower.
Barley continues to see that £15-17 spread as we anticipate harvest to begin w/c 12th July, weather dependent!
Soya
We saw a rise of between £30-40pt on soya at the start of the week following the acreage report but like the grain markets, that has since moved lower, around £10 up on pre report levels. There are good rains forecast in key growing areas and it is not believed that Monday’s WASDE report will move the acreage figures from last week. As mentioned before, the current acreage levels of 87.5 Mln Acres is enough to satisfy demand and re build some of that tight carryout balance but, there is absolutely no margin for error now so weather is going to be the main price driver now.
And Finally…
How Britain has changed since 1966- the last time England reached a final of a major football tournament.
Back in 1966 when Bobby Moore helped lead the England football team to World Cup victory, the Aberfan tragedy was at the forefront of everyone’s minds.
A boost in household disposable income meant that washing machines, cars and televisions were becoming a staple of the average family home. Advertising campaigns calling a fridge ‘every woman’s best friend’ because it cut down the need for daily food shops were plastered across towns and cities. The average Britain took home £798 per year as their salary, compared with todays £31,461. The average house price was just £3,465 (4 times the average salary, compared with todays average price £251,000 (8 times the average salary).
The country was still recovering from WW2 and Labour’s Harold Wilson was struggling to balance his public spending ambitions with the £400m deficit left by the war, arguably today’s politicians are in a similar situation working their way through the biggest deficit since WW2 following the Coronavirus pandemic.
Comparing more light hearted topics, the most popular musicians of the year were Tom Jones, The Beach Boys and of course, The Beatles and fashion in the ‘swinging London scene’ was beginning to emerge with the creation of the mini skirt pushing the limits of acceptable attire. This weeks top chart place is taken by Ed Sheeran, arguably the best song writer since The Beetles!
Football was also a very different place with footballers earning £44 per week compared to todays £300,000 per week!
Regards,
Kay Johnson & Martin Humphrey
