Monday Market Briefing - 18th January 2021

Old crop gained £6 on the week and new crop a more cautious £1.50. Well, that will teach us to second guess the USDA !

Last weeks report shocked the market by reducing 2020 US corn yields very sharply. We got the tightening of stocks we wanted but from a different source, which means the USDA still has some catching up to do in other areas, and things will get worse on the stock front before this season ends. Later in the week Russia confirmed a hike in export taxes for wheat ($50), corn ($25), and barley ($10 ) which will apply from March to June. This is aimed at stemming the rapid flow of grains out of the Country and led to the cancellation of Egypt’s latest wheat tender – they didn’t like the new prices they were being offered but it’s hard to see them being any lower next time. There are plenty of buyers with things still to do for old crop both internationally and at home. Fresh supply will be keenly sought at least until the first French new crop arrives in July.

Traditionally, with high price spikes, the arrival of new crop would signal the end of the party. But, as we have said before, this year’s action followed a world record grain crop in 2020. There is expected to be a crop in the ground capable of extending that production record in 2021, but it’s far from safely in the barn yet. At this stage, the priority is to make the most of these old crop opportunities with any remaining stocks you have. There are good opportunities around on wheat and barley for prompt movement at seasons high prices.

Have a good week and stay safe.