22 August 1997
Grain market update
Thursdays trading – 21 August 1997
EARLY strength in Sterling saw futures drift down £0.90 in the morning session, but a fall of DM0.03 over lunch brought a slight rally in the afternoon session to finish a mere £0.35 down on the day. Spot wheat was still valued at £80/t ex-farm, with barley still at around £70/t ex-farm.
Early indications are of lower-than average-yields, 0.5t/acre down, which would indicate a crop of around 14.5 million tonnes – down from 16.2m tonnes. We must be careful in assuming lower production will cause higher prices, as we are missing spot business due to Danish wheat valued at £80 FOB. against UK at £86 FOB.
French low-quality wheat is also finding traditional UK homes into Holland, and reports of low UK quality wheat in the Mediterranean will make buyers cautious. Reports that two, 25000t vessels have been bought back by UK shippers will also limit the upside of UK wheat in the spot market.
Chicago finished higher following the almost limit up rally in corn and the USDA weekly export sales figures of 750,000t were above the expectations of 500,000t.