Monday Market Briefing - 4th January 2021

So, we have a Brexit deal and markets can slowly emerge blinking into the light, and the prospect of unfettered trading - the threat of tariffs removed. The deal appears to be fair, neither side has been humiliated, and whilst it may be a bit thin in places, efforts have been concentrated on ensuring the free movement of physical goods - great news for our sector. The hypothetical threat of future tariffs will always be present on these new trade terms , but in every practical sense we are free to carry on as normal.  

We should see renewed interest initially for old crop malting barley, feed barley and oats. Surprisingly, currency has not moved very much firmer since the announcement so we are not facing a price adjustment for our exports. Over the Christmas period UK new-crop futures firmed as expected to remove most of the excess discount we had been carrying whilst the tariff threat was still there. Beyond our shores, world markets were led mainly by US markets which traded to new highs on old crop wheat. Black Sea origins continue to rein in expectations about ongoing supply and South America has some drought concerns. US markets anticipate strong demand for their remaining old crop supply as the season progresses.

All in all, it’s a positive and bright start to the new Year. Spot bids may be held back a little by the indigestion in the system after the December rush, but we expect positive interest for deferred slots and call the market higher for the week on both old and new crop positions.

Have a good week and stay safe.