The seemingly never ending bearish view on the market has taken a definite about turn this week, with a combination of rising tensions in Ukraine and continued dryness across Northern Europe. It has been made very clear that Russia no longer feels that the grain corridor is being used to move the grain it was designed to. Soya prices are still coming lower, albeit at a slower pace now with the Ukraine situation escalating. 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. Indian soya suppliers are in the process of re registering for their organic status after the EU removed all Indian bodies from their approved organic suppliers, which meant that the UK followed suit.

The delay in the agreement of Biden’s budgetary plans has weakened the $. The question with wheat now appears to be, how much lower could it go, and will the switch to new crop be the trigger to level prices? The Ukrainian grain corridor has been extended. European crop ratings this week are still very good but the long range weather forecast needs to be monitored as it suggests another summer like 2022. Soya prices are still falling, but slowing due to concern over dryness for El Niño weather patterns. Organic prices appear to have found a level at the moment which is generating new crop trade. The sunflower supply situation has now rectified itself which has levelled those prices back out again.

Interest rates were risen further, up to 4.5%, the highest levels since 2008. The wheat market has now switched to a point where new crop is a premium over old crop. Currently UK wheat is still too expensive for export. Canadian crop is doing well and likely to be able to offset what has been lost in North America this winter. Soya prices are still falling but there has been a stall. 35% of the US crop has now been planted, well above the year on year average of 21%. Organic prices appear to have found a level at the moment which is generating new crop trade. 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.

The £ has reached yearly high of $1.26 after the Bank of England suggested that they would continue to raise interest rates further. Wheat started the week testing new contract lows, following corn lower, but by the end of the week had turned round. The UK remains £10-15 away from being competitive for export which would suggest that prices could come lower still the closer we get to harvest. Soya prices continue to move lower. Organic prices appear to have found a level at the moment which is generating new crop trade. 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. 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.

The £ has seen very little movement in the past week. Wheat continues to move lower with new crop wheat now being offered at sub £200 for the first time in over a year! Globally there is still a huge volume of wheat available which needs to find homes before harvest. Maize has been trading at a premium of circa $60 over Chicago futures but that dropped down to $10 this week. Soya prices are off around £20 in the week this week. 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. 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.

The £ has seen very little movement in the past week. Wheat saw a slight recovery at the start of the week over concern that the extension to the grain corridor in May could be in jeopardy. We also saw this week Poland and Hungary attempt to stop imports of ‘cheap’ Ukrainian grain to their traditional export homes. In terms of new crop fundamentals, the UK winter wheat crop is slowly starting to improve, and French soft wheat is currently at 94% good/excellent. The market is struggling to hold any rally with the glut of wheat still left from the 2022 harvest and as the next harvest is approaching fast. Soya prices are slowly coming off still, due to slow demand from China and Brazilian shipments weighing on prices. Sunflower vessels are still struggling to make their way through Turkish controls so this is causing short term supply issues. Organic prices appear to have found a level at the moment which is generating new crop trade. 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.

The £ has seen strength this past week with reports that it could top $1.30 by the end of the year. Energy prices are also falling. Wheat has broken clear of the £200 support line and has been trading between £190 and £198 for the past 10 days, suggesting this is now a new normal trading range – for now. European market prices are effectively capped by these cheaper Russian, Ukrainian, Polish supplies effectively keeping a cap on all market prices. Soya prices are slowly continuing to come off now that the South American crop has all been accounted for. 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. 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.

The £ continues to move within that 0.01 range after news that inflation hit 10.4% in February. Wheat prices have been largely on the rise this week after testing that £188 level and looking settled around £197. Old crop is still holding a small discount to new crop which is not encouraging farm sales when there is opportunities to sell but the market is so awash with physical wheat and rolled contracts, that this does not appear to be causing an issue. Soya prices are still making huge daily swings of £10-15 some days which makes forming a long term strategy on proteins difficult. Sunflower origins for the UK look that they will switch back this season from predominantly Argentinian, back to traditional Black Sea material. Organic prices continue to drop on old crop as the market struggles to find any real demand.

The £ continues to suffer with news this week that inflation hit 10.4% in February. This week has seen May futures test a bottom of £188, before settling back up at £204 by the end of the week. There are some bullish watch points we need to be aware of for new crop. In terms of weather patterns as well, the US has seen some late cold spells which have caused frost in some areas across the Midwest. There is still a huge amount of domestic grain and this is echoed across the world, and this will give us an historical carry into next season which could counter some of these bullish watch points. Soya does feel like it has priced in the Argy story of a 25 MlnT crop and is now focussed on the Brazilian harvest and potential US plantings. Sunflower origins for the UK look that they will witch back this season from predominantly Argentinian. Organic prices continue to drop on old crop as the market struggles to find any real demand.