Monday Market Briefing - 11th January 2021

Old and New Crop markets each posted £3 gains last week, continuing the theme of tight supply and healthy demand. The UK saw fresh export activity particularly on barley which served to confirm that the new EU:UK trading arrangements are as straight-forward as we hoped and easily negotiated. Much needed rain was expected for Argentina but has largely disappeared from their forecasts over the weekend, which might give markets another shove in the first part of the week.

However, traders main focus will be on Tuesday’s WASDE* report from the USDA, the first of 2021. These reports often cause a hiatus in the otherwise calm flow of markets. On this occasion the markets think the report will show a further tightening of world stocks in all major grains. This is partly because the situation has worsened since the last report in December, but also because that report was not felt to have fully accounted for how tight things already were then. Hence, the reaction to the new data will depend partly on the adjustment itself, but also on whether it goes far enough to match expectations.

We think the USDA will probably not go as far as some traders would like; markets remain supported but a choppy week staying around unchanged is most likely.

It’s a good time to look at your remaining barley stocks, our busy programme into Shoreham has resumed and there are excellent deals around on old crop balances. Don’t forget to give us a call as soon as any existing contracts finish movement if you have some left in the barn.

Have a good week and stay safe.

( * World Agricultural Supply and Demand Estimate )