ao link

Markets

Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

Weekly grain and oilseeds market view from Europe, March 20

TwitterLinkedineCard

Markets in the UK continue to follow global concerns and more recently the weakness of sterling.

 

At present it is hard to predict when the coronavirus situation will ease and stability will return, not only to the grain markets, but all markets.

 

Oil markets globally are facing hurricane force headwinds as a combination of fundamental and external factors are creating a turbulent time for traders.

 

 

What to watch

Excess moisture in the US Midwest may delay sowings in some of the early-sown states, although the main sowing period is still a few weeks away, which may allow fields to dry.

 

 

 

London May wheat futures closed on Thursday at £159.25 per tonne, a rise of 6.7% week on week.

 

Paris May wheat futures settled at E189.25 per tonne, a gain of 6.5% week on week.

 

Paris May rapeseed futures settled at E350.00 per tonne, a fall of 1.9% week on week.

 

 

 

UK grain

Wheat prices up as sterling falls

Markets in the UK continue to follow global concerns and more recently the weakness of sterling.

 

The recent drop has helped support prices. But where a one-for-one move, in the week to Wednesday, would have moved wheat values up over £12 per tonne, they have only moved less than half of this.

 

Still, any upward move in the current environment should be viewed as a positive and when you look at the spread from May 20 to November 20 futures prices there are still opportunities to be considered.

 

The better weather for some has allowed tractors back onto the land for spring planting and winter crop maintenance. The market needs to understand the impact of the current situation with regard to demand.

 

Consumers still need to eat and as long as logistics and farmers keep going then there should ultimately be few concerns for the general public, although short term supply is obviously disrupted through panic buying.

 

This year was always going to be a tough one to navigate but the curve ball just got bigger and will hopefully be a wake-up call to those in power and those who take food for granted, about the importance of food security, why we have an agricultural industry and what is actually involved in keeping shelves full of perishable goods in shops.

 

Cecilia Pryce, Openfield

 

Global grain

Commodity volatility amid fears of global shutdown

At present it is hard to predict when the coronavirus situation will ease and stability will return, not only to the grain markets, but all markets.

 

Commodity volatility has been plain to see as the increasing threat of a global slowdown is putting traders into sell-mode.

 

The dispute between Russia and Saudi Arabia, which has sent oil and energy markets drastically lower, is not helping.

 

This has pushed US corn to fresh contract lows on the likelihood of lower ethanol demand, with crude now under $30 per barrel.

 

Currency markets are adding to the volatility as governments slash interest rates in an attempt to add stimulus to their economies. Sterling has come under particular pressure, which has supported UK farmgate prices.

 

If the above factors are taken out of the equation - and it’s a big if - the fundamental outlook for the grain complex still remains bearish.

 

Talk of higher 2020 global wheat production, and considerably higher US spring corn and soybean acreages, were already providing the major resistance to any significant move higher in prices.

 

Weather has also been benign, with abnormally warm conditions reducing winter losses in Europe and Black Sea regions to almost zero.

 

Although western Europe has received too much rain, reducing winter sowings, it will probably increase spring plantings.

 

Excess moisture in the US Midwest may delay sowings in some of the early-sown states, although the main sowing period is still a few weeks away, which may allow fields to dry.

 

David Woodland, ADM Agriculture

 

European grain

Unprecedented times

These are uncertain and unprecedented times - international actions surrounding Covid-19 significantly impacting currencies with sterling showing a fall of 12% over the last month.

 

As we look into the future wheat could benefit from the crisis as individuals and countries take action to increase their food security (stock building can be expected during the coming months as the virus crisis may return over the winter).

 

On the domestic front, our markets have, thus far, been hit less hard than other assets and commodities. We wish all parties well as we follow guidance to stay at home.

 

Gary Phillips, ODA

 

Oilseeds market

EU rapeseed attempts to recover from a near five-year low

Oil markets globally are facing hurricane force headwinds as a combination of fundamental and external factors are creating a turbulent time for traders.

 

Crude and Brent oil are down over 60% year-to-date to their lowest level in nearly two decades as fears over a slowdown in global growth intensify due to the Covid-19 outbreak.

 

On top of this, the Saudis are jumping on the opportunity to win back market share from Russia and at the same time put pressure on shale gas producers in the US, pumping oil aggressively and adding to the tide of global oil.

 

As it stands rapeseed prices are down 17% from their peak in January, on a spot Paris futures contract basis, although UK prices have been slightly cushioned by a tumbling pound, which crashed to its lowest level against the US dollar since 1985.

 

Within vegetable oil markets the situation remains tight, and this will likely still be the case when eventually equity and energy markets recover - whenever that may be.

 

A lot of questions remain unanswered about the impact of the coronavirus crisis on short term supply chains and longer term global economic stability.

 

For now, palm oil output continues to decline and rapeseed stocks and next year’s production both remain under pressure. In such economic/political turbulent times, volatility is here to stay.

 

Benjamin Bodart, CRM AgriCommodities

TwitterLinkedineCard
Related Stories

Producer, merchant positions in ags for week to April 6

Markets Extra lists the latest official data on commercial positions in ag commodity derivatives

Hedge fund positions in numbers for week to April 6

Markets Extra lists the latest official data on hedge fund positions in ag commodity derivatives, and how they have changed week on week

ANALYSIS: Are China's wheat imports about to get the corn treatment?

Competitive pricing is driving Chinese livestock feeders to use more grain in their rations. That could see wheat imports far exceed current forecasts

Cotton, wheat futures gain as USDA stocks downgrades top forecasts

A cut in the Wasde to the forecast for world wheat stocks proves a particular "surprise". But exuberance is capped by downbeat soybean data revisions
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2021

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069