Currencies

The £ continues to struggle to find any real support dropping down to $1.21 and €1.15 in the past week with continued concerns over how the country will fair through a recession and also continued questions over the strength of the PM’s position in Downing Street.

Wheat

Wheat continues its very clear downward trend this week, with prices down £10 in the week but £32 off their recent highs!

The USDA report this week was viewed very much as bearish although with very little changes to the previous report. The key driver seems to be more that harvest in the Northern Hemisphere has started with better than expected early data in both Europe and North America.

The grain corridors being supported currently by Russia are helping supply through the Black Sea although the market is nervous as to how long this will continue.

For the UK, quietly expectations are that we will produce a crop circa 16 MlnT, back to the levels seen 3 years ago. This would give a clear exportable surplus of 2.5 MlnT and as prices stand, UK wheat is still too expensive versus Danish into Northern Spain, suggesting that LIFFE will continue to weaken.

Despite the optimism, we believe this is an opportunity more than a long term correction. The world is still not awash with wheat and despite the UK having an exportable surplus, we are a small fish in comparison to Global Supply & Demand and will to a degree, follow global markets and if they begin to rally again, so will LIFFE.

Harvest pressure may take place this year, and could provide an opportunity this year - so if you would like to discuss longer term contracts for this period, please speak with your Sales Specialist.

Soya

Soya still has this old crop/new crop story with Argentinian old crop premiums still holding until the US crop is further developed and close to coming to market.

The planting story in the states so far is a positive one with good temperatures but sporadic rainfall which so far is not an issue. Again, similar to grains, this is a market on the edge and in no way awash with supply even with a bumper US harvest so all the time good news is being given to this growing story, that is an opportunity to buy lower prices but long term, prices are likely to rally going into the winter.

Organic

Organic prices are slowly falling, taking some of their lead from conventional markets. There is a definite old crop/new crop split with old crop (through to October) having been largely sold out for weeks now but the new crop offers are moving closer to the £500 mark for grain, around £50 per tonne off the high of initial offers.

It is too early to really call prices for proteins which are not due into the UK until January time but early indications from India are that the crops are looking good. China is becoming increasingly unreliable to India will go back to being our main source for next season.

Quarter 4 for this year is looking like our first opportunity in the past 12 months for prices to ease - should the current situations with crops remain unchanged and there are no further surprises from Russia!

And Finally…

Of all the help to Ukraine….?