ODA Market Highlights - 6th Jun 2019

Markets mixed on either side of the Atlantic

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Another highly volatile trading session was witnessed on Thursday. The session opened in a defensive mode, with US, European and UK wheat futures starting in the red. However, by late afternoon, Chicago wheat futures reversed direction, posting a 19c/bu gain at the time of writing. MATIF wheat also switched into the green later in the day, but French rapeseed and corn remain negative for the session.

Both DEFRA and AHDB have had a busy week. First the adjustments to the English area sown, then the revised S&D balance sheet published yesterday and today, the latest installment in cereals and oilseeds usage date was released. This latter information confirms the balance sheet prognosis, with a steep reduction in wheat used by the compound feed industry in April. 

The end result? Ending stocks are seen at 1.98Mt. This will feed the new crop balance sheet and with an anticipated 15.5Mt+ domestic crop looming, export competitiveness will need to be maintained.
More rains are expected in the US Midwest over the next week and this will continue to delay corn and soybean planting progress. It will not be long now until detailed farmer survey information will be available and this will help narrow and define  the current wide rage of ideas about cropped area. Price volatility will only fade when this information is accepted. 

Crude oil prices have fallen dramatically in the last 10 days as the implications of the US/China trade visibly reduces global economic growth. Brent crude is currently trading at $60.45bl, and falling. Any further economic downturn in Europe could re-kindle worries over Italy’s massive sovereign debt problems,