Monday Market Briefing - 9th November 2020

Global fundamentals remain strong as China continue their buying spree of grains and oilseeds.  This Asian demand will start to switch to South America, and with dry weather in Brazil and Argentina affecting the potential output of crops, soybean values have pushed to a 4-year high.  Strength in the grains markets is predicated on continued Chinese buying – particularly with their strained trading relationships with Australia.  In addition, Saudi completed another tender for 860kMT of wheat last week - most of which will be supplied from Russia/Black Sea origins.  This forward buying is depleting global grain stocks and therefore we are increasingly dependant on a bumper crop for Harvest 2021.

Closer to home, UK wheat demand continues to be satisfied as growers benefit from the ongoing high domestic prices.  Group 1 milling wheat over £200/MT ex-farm and soft biscuit wheat also attracting high premiums have engaged the farmer to a higher degree than normal.  Imported milling and feed grains continue to be executed in case of a no-deal Brexit keeping wheat stocks healthy, and pushing new demand into deferred positions for Jan-Mar 2021.  Meanwhile, Bartholomews remain extremely busy on our execution of malting and feed barley through our export facility at Shoreham, loading the latest cargo over the weekend to free-up silo space (and two further malting barley vessels) this week.

New crop grain values remain firm despite the likelihood that the UK’s wheat planted area will easily surpass the AHDB’s 5-year average figure of 1.8 million hectares.  Given “normal” weather, this should revert the UK back to a NET exporter of wheat next year and we will be looking to reinstate our export trading relationships with the EU in a post-Brexit environment.