Monday Market Briefing - 7th December 2020

Post-Brexit negotiations continued through the weekend and into today. Sterling value against the euro has fallen to it’s lowest level in 6 weeks as counter-parties fail to agree on a few key issues. Meanwhile, the media return to “No-Deal Brexit” and “Hard-Brexit” as their phrases to describe the possible outcome.  However, we learned this week that EU member states do not need to vote in person to ratify any agreement, so an 11th-hour deal is still possible.

With ongoing uncertainty on tariffs to the EU, Bartholomews continues to place any available export tonnage of barley onto vessels for pre-Xmas arrival, as all shipments need to be customs-cleared by Dec 31st. With much of the French barley crop being shipped to China already, UK spring malting barley has been in high demand for the Sep-Dec 2020 period into Europe.

Despite weaker sterling, (making imported grain to the UK more expensive) UK grain markets have fallen £7/MT from this time last week.  Global demand remains strong, but we have seen more positive crop forecasts from both northern hemisphere (Canadian wheat) and southern hemisphere countries (Brazilian soy and corn & Australian wheat).  In particular, recent rains in South America have boosted yield forecasts and the Brazilian soybean crop is pegged at 131.79 mln MT – which would be an all-time record.  Prices for protein/veg oil crops continue to firm which has encouraged a small recovery in EU rapeseed production to 18.2 mln MT for Harvest 2021 (up from 17.2 mln MT last year).