Currencies
The £ continued to rally this week hitting new yearly highs of $1.24 before dropping back following the announcement from the Bank of England that base rate was rising by a further 0.5%, now up to 3.5%. This means rates are now at their highest level since 2008.
Indications still point towards further hikes through the first part of 2023 up to circa 4% before beginning to fall back down to around 3%.
Wheat
Markets continue to test that £240 support line on May futures this week but currently has not been able to break this line. Fundamentally there are huge volumes of cheap Black Sea wheat flooding the market and Australia have now increased their production by 14% on last season to 36.6 MlnT.
The USDA report last week did lower global production for 22/23 by 2.1 MlnT (mostly from dryness in Argentina), however, because of continued consensus that a recession will lower demand, overall S&D figures were only reduced by 0.5 MlnT.
Soya
Soya prices have settled following the report last week which reduced Argentina’s production by 7 MlnT in one hit! The USDA report took a slightly more conservative approach, holding Brazilian volume at 152 MlnT and reducing Brazil to 49.5 MlnT (only 2.5 MlnT off top level predictions).
Organic
Organic prices seem to have found a level now albeit, not really trading. Again, shippers have huge stocks and compounders have long commitments, due to the downturn 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…
Nativity Camels on the loose
Three camels made an escape from a nativity scene before filming could take place. This did not happen in the UK, nor in the middle east, but in Brisbane.
The camels were due to be filmed in a live nativity scene, but they opened the gate to their pen, and headed off for a stroll, causing some traffic disruption on their journey.
The camels strode off down the road, and numerous pictures and videos were uploaded to social media of the surreal Christmas escape, with one person quipping: ‘Sounds like they couldn’t find any wise men at the church so they went looking elsewhere’.
The breakaway group of camels were soon re-united with their owner Whane Morris. Whilst the Bridgeman Community Church who had supposed to host the filming posted on social media ‘Our camels got a bit lost on the way to Bethlehem! Gladly they’re back safe and sound now’.
Regards,
Kay Johnson & Martin Humphrey
