Monday Market Briefing - 10th January 2022

New Year markets continued a drifty tone last week, but were rescued by a Friday rally as more worries emerged about the South American harvest. There are lots of macro-news stories around Covid, how the world economy emerges from the pandemic, interest rates etc which makes the overall picture very difficult to read for now. What we can say is there is solid buying interest for nearby positions in both wheat and barley. Farmers are, so far, not being panicked into chasing these bids and the market feels quite well balanced for the time of year. There is a USDA report this week but assuming no shocks in that, a relatively calm sideways week is probably on the cards.

Old crop prices are of course, still at very high levels. Eventually the prospects for the 2022 crop will take over as the markets main driver, but in the short term ex-farm prices probably react mainly  to changes in exchange rates and freight costs. GBP was back at 1.20 briefly last week, a level not seen since Feb20 before the first Covid lockdown. Shipping rates are roughly double pre-Covid levels and show little sign of subsiding so far. The hope is that the quieter Jan-June period, at least for our sector, might bring some relief which would feed into farm prices.  

Shoreham loaded three vessels over the Christmas period and has a busy January line-up including soft wheat and yet more malting barley. The latter remains very strongly supported and we are keen to see offers from long-holders who might want to take advantage of this exceptional market.

Have a good week.