Monday Market Briefing - 21st September 2020

Last week was certainly a game of two halves. Markets slipped £4 by Wednesday, only to rebound and end the week £2 up at a new high. Currency again played a part but there is more to it than that. In the US, soybeans and corn are being driven higher by continuing Chinese buying activity. We know that China is embarked on a project to rebuild its pig herd after 45% of it was lost to swine fever in 2019. Estimates vary as to how long this will take but few say less than a full year, so it seems the Chinese Govt is going to stay in the market for some time yet. The prospect is enough to draw speculative money into the ag-markets as well; wheat may be a passenger in this environment but it will follow the trend whilst market conditions stay the same. In other news, the US Govt announced a new Covid-aid package for its farming industry, but most of the cash is triggered by low prices and its unlikely corn/wheat growers will see any of it at current market levels.

Having finally broken out of its long term range on the upside, LIFFE wheat will stay supported in the short term and we wait to see how far the move can progress.

We have our first malting barley vessel arriving this week. It’s exciting to get the 2020 campaign off to an early start and with two more vessels very close behind along with our domestic programme, it’s a busy time. The Scottish crop has been harvested in excellent conditions (similar to Scandinavia’s) and is being offered by truck into more northerly English homes to replenish local stocks there. EU wide, we have lost a lot of malting barley from the balance sheet and the nominal annual surplus is much reduced, but it’s still a surplus. Healthy prices are available for most grades for pre -Brexit movement.