The £ is back to being `range bound’ against both the $ and the €. Little Brexit news this week. Greater restrictions continue to be implemented. Wheat markets continue to rally. Funds in US extend long positions. UK has huge barley surplus driving discounted price to wheat. Soya has followed with Chinese demand and US figures driving a price rally. 2000 year old Roman coin expected to fetch £5 million at auction.
The £ made back some ground this week on renewed optimism surrounding Brexit as both sides continued negotiations in Brussels. Wheat markets have seen another choppy week. Prices had started the week easing. US prices had come back enough that they again became competitive for export. Soya followed a similar pattern to wheat. Strong Chinese demand for soya and the biggest summer drawdown of 858 billion bushels of stock.
Sterling has recovered slightly from last weeks lows. Brexit discussions continue as both sides need a deal. UK signed trade deal with Japan. US economy on target to shrink by 3.7% this year. ECB looks for stimulus package. Wheat saw another strong week. World wheat production is higher at 770.49 Mln T. Soya hit season high on back of USDA report. China is buying US and Brazilian bean. There remains a surplus of soya globally. A village housewife turns out to be a Russian Intelligence officer.
Brexit stalemate causes Sterling to struggle. Tech stocks drive USD to a four week high. Global wheat prices continue to rally. Indications are that prices have now reached their top and are due a correction. UK harvest is all but complete. Soya rally running out of steam and is due a correction. This seasons crop is the third largest on record. New York City’s 19th Anniversary of 9/11 will be unlike any other.
Sterling briefly reached new recent highs this week against $ of 1.3425, before settling back down around 1.32. Against the €, sterling is at a 12 month high. US prices continued to move higher this week with the reduction in corn numbers. The UK price premium is still being largely driven by a sporadic North/South divide harvest. Soya prices have rallied again this week. Rains from Hurricane Laura last week will not reach critically dry areas.
The £ has swayed between that recent range of 1.30 and 1.32 against the $ this week. We are now less than 70 days from the US elections with the market not really giving much away about how it would react to either result. Russia this week have further revised their crop upwards to 82.8 MlnT. There are now reports of hurricane Laura, which is currently moving up from the Louisiana. The plantings in the US were record breaking this year, 73% good/excellent, compared with 53% average for this time of the year.
The £ at one point reached back over 1.32 before settling back down again to around 1.30. The USDA report last week was overall bearish to wheat however, the market still rallied post report. Soya has had a choppy week. The market initially followed wheat and did rally post USDA report. The pod count was reported to be 1,297.93, ahead of the 3 year average.
The dollar has managed to claw back some ground this week. UK wheat prices started the week a little weaker. UK prices have followed this global trend lower this week. Soya, like wheat initially moved lower at the start of the week, but then rebounded to the weekend. Crop ratings have been improved for the 4th week in a row, with 74% now at good/excellent, compared with 52% last year.
The £ has lifted back up to 1.31 against the $ for the first time in months. The US economy shrank by 32.9% in Q2 of this year, the largest contraction on record. US wheat prices have remained largely unchanged week on week. Spot premiums in the UK are beginning to erode now that harvest is underway. Soya is still finding support from continued Chinese buying. The crop ratings now stand at 72% good/excellent.
The £ has now moved past its 30 day moving average against the $. The $ hit a two year low this week. US wheat prices have held firm this week with the weakness in the $ making it look good value to outside buyers. Chinese stocks are now at their highest since November 2018 so how much more buying will need to be done is now in question.
The £ is down against the dollar week on week but up from the lows following yet more COVID infection data from the US. US wheat prices rallied this week on the back of buying interest from China. The market appears focussed on the weather story at the moment. Like most commodities, soya has also been fairly range bound this week.