Another topsy-turvy day for the markets
By ODA UK | Published at
Around half of the gains made on Thursday for US corn, beans and wheat were lost during Friday’s session. The French Euronext market fell in sympathy, with milling wheat€1/t lower. The only market that fared well was our own UK LIFFE wheat market, which is trying to close the day just in the green. Nov19 is currently trading at £156/t and May20 at £162/t. The debate still rumbles-on in the US about how much corn and beans will or will not get planted, due to wet conditions. However, increasingly markets are talking about potentially too dry and warm conditions in Russia alongside a dry outlook for parts of Canada. While it is too early to say these areas have a problem, the will both need to be monitored closely in the coming weeks.
DEFRA released their long-awaited analysis on the discrepancy between their own June survey of agriculture area data and that from the RPA. For the 2018 UK wheat area, the two surveys differed by over 100Kha, which is a difference in production of some 800Kt. Their analysis delved deep into the bowels of each’s survey methodologies and found that the DEFRA area is around 50Kha too high, prompting a 390Kt drop in UK wheat production, to 13.6Mt (ODA have been at
13.7Mt for the last 8 months). As a consequence, DEFRA are being forced to publish a revised S&D balance sheet next week. The UK is going to end the season with very tight ending stocks, with perhaps significant consequences for prices
later in the season, should the harvest be delayed by any significant length of time.