Monday Market Briefing 27th July 2020

As expected markets were lower in the first part of last week, but an International Grains Council (IGC) update pushed us back up to close the week almost unchanged on LIFFE.  Of particular note was the IGC’s forecast that wheat stocks in major exporting nations would decline again next year to barely 75% of the levels seen three years ago. Russia, USA and the EU are all of concern and these origins fuel the world’s trade in wheat, so much so that relatively small crop adjustments have a large impact. We don’t have a catastrophe here capable of driving markets into orbit but wheat supplies look set to stay keenly sought after.  Its still possible for some short term price dips to show as fresh harvest material comes to market but these will be short term only and we expect the market to hold around its current level this week.

At home , the south has seen a fair number of wheat samples , farmers getting into early group 1 crops mostly. There have been some widely publicised huge yields in the press, we’ve seen more modest ones typically - about in line with the five year average but still something of a relief to many. Bushel weights over 80kg have been common place and proteins variable but plenty of 13%’s amongst them. We do now see some keen interest in the market to buy August and September positions and the combination of yield, quality and price will surely tempt a few more farmers into action soon. Its not clear how deep the August demand runs so get it sampled and act quickly if the early slots are of interest.

The news from the Brexit negotiations was less encouraging. Another negotiating phase has concluded without real progress being made.  This is a real headache for the malting barley campaign where we need to export- but in wheat terms it’s a positive. Sterling keeps on falling making imports more expensive and thereby trickling more value into our home grown stocks. Don’t forget if a deal is produced at the eleventh hour,  the resultant surge in Sterling would make quite a dent in the prices we are currently enjoying.

Have a good week and stay safe.