Monday Market Briefing - 18th August 2025
There’s no getting away from it, Tuesday USDA update was a bit of a bombshell. In raising predicted corn yields to an astonishing new record they added at a stroke 25 million tonnes to this years US corn crop. Traders might be sceptical of these new numbers but the USDA is not prone to exaggerating crop prospects and clearly it’s going to be a big one. The news was enough to drive Nov LIFFE below £170, eventually closing down £5 on the week, the only reason it wasn’t worse is that we were already at such low levels to start with. Farmers across the UK and Europe are not rushing to sell the newly harvested crop and we might now see a widening gap between the markets valuation of wheat on the exchanges and the price you have to pay on farm to actually buy anything.
Perhaps the greatest threat left in the market is not so much to the spot price but the carry to forward positions which remains pretty healthy. The 2025 crop is now seen as large enough to cast a shadow that extends into the 2026 crop as well, which will surely lead buyers to conclude they don’t need to pay a risk premium for that crop either ?
At home the government confirmed it will not be acting to rescue our beleaguered ethanol market, no surprise there as doing so would have involved admitting they bodged the rushed trade deal with the US granting tariff free access to US ethanol (which is of course produced from corn grown by farmers who receive hefty Govt subsidies for growing it in the first place ). Probably the Hull plant will now close but the larger Ensus plant on Teeside is expected to win a reprieve due entirely to its strategic importance for CO2 production.
Not the most uplifting of Monday morning reads then, but to end on a slightly positive note, this was the week where all the bad news is finally out there. From here on we will be in a market which is not awaiting more shocks and we can get down to the business of finding added value for what is, particularly in the South, a fine crop of wheat and barley with real marketability attached to it.
Have a good week.
