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Wheat Market Update - Wednesday 29th April 2009
UK and Europe Harvest Overview
UK May ’09 wheat futures have traded within a £5 range over the last two weeks with external markets, currency, restricted farmer selling and weather all influencing day-to-day values.
Limited availability of high specification bread wheat is continuing to support premiums which will likely remain robust in the run up to harvest. The spread between old and new crop has widened slightly since the previous report and continues to offer an incentive for farmers to hold onto their stock.
US/World Overview
A weekend outbreak of swine flu in Mexico has weighed down on all markets this week with a potential downturn in feed grain demand putting pressure on a number of commodity markets around the world.
Reports of heavy rainfall in key U.S. grain growing regions this week may aid wheat progress in Southern regions but is likely to further delay maize planting progress. The market focus seems to have shifted from feed grain fundamentals in light of the swine flu outbreak and until the full extent of the outbreak is known trade will remain nervous.
Meanwhile, recent planting estimates, released by Statistics Canada (Canada’s national statistics agency) were seen as negative on the wheat markets. They forecast wheat plantings at 25.161 million acres in 2009/10, up from 25.009 million acres in 2008/09 and above trade expectations.
Summary
Wheat markets are still struggling to find direction at present with values trading within a narrow range. Prices are continuing to be influenced by currency and external markets and attention is still focused on potential weather events that may offer real support to the market in the run-up to harvest.
Wheat Market Update - Tuesday 14th April 2009
UK and Europe Harvest Overview
UK wheat futures have remained fairly flat over the last few weeks with large European carry out stocks, strengthening Sterling and favourable crop conditions across Europe offering no real reason for the market to trade higher.
Meanwhile, UK bread wheat premiums have remained robust, helped by light farmer selling and low availability of good quality wheat. The current spread between old and new crop wheat values is creating an incentive for farmers to hold onto their stocks into the new season, yet in practice this may not always be possible.
US/World Overview
Welcome rain in key US wheat growing regions over the weekend eased crop concerns and should limit market gains over the coming week. However, dollar weakness, strength in equity markets and favourable US weekly exports (20.6Mt vs. 15.2Mt last year) may offer some underlying support.
Iraq has announced a new tender for 50,000t of any origin wheat with a deadline for bids on the 19th April whilst Russia is reportedly expected to export 2Mt (mostly wheat) from intervention stocks.
Summary
At present Global, European and UK markets appear to be drifting with no real fundamental news to trade on. Outside markets are continuing to influence any day-to-day market movements and the recent weather concerns in the US seem to be easing. However, weather issues in the run up to the key yield forming periods across the northern hemisphere could still impact wheat values.
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