Monday Market Briefing - 25th March 2035

UK wheat had it’s best week in ages, have we turned the corner or is this just a dead-cat-bounce ? Europe led the price rally compared to a more sluggish US market, perhaps a note of caution there as we rarely separate from US sentiment for long. An early Easter means the US cropping estimate lands Thursday afternoon - just as we go into a four day market closure and this might add to the volatility as traders have a very short time to react to the new numbers. Expectations are for a 5 million acre drop in wheat/corn acres this year which looks manageable in supply terms any lower than this would add to the excitement.

EU markets were more focussed on the tariff arrangements for the regions grain movements. A prohibitive import tariff (E100) was applied by the EU to Russian grain, very little of which heads this way anyway. More importantly, Russia raised their own export taxes by 5% for the next two months. Egypt will be rueing a decision to turn down tenders on price grounds a couple of weeks ago -and we can assume Russia finally does see a need to start to regulate the outbound flow of wheat as old crop supplies are drawn down.

A bumpy week ahead for sure,  but the market has now rallied to levels that look more sustainable for the longer term, barring a big shock on Thursday, the realities of the sluggish World economy should start to reassert themselves soon. Long holders might want to take a look at the old crop bids now as clearing out the barn will be looking a lot more attractive than it was before the rally.

Have a good week.