Commodity Market Report 6th June 2019

Currency

The ongoing saga around UK politics seems to have left Sterling relatively unchanged over the past week with it currently around U.S. $1.27 and Euro 1.13 which is towards the lower end of the recent trading range. Financial markets don’t like uncertainty which Sterling has in abundance currently due to Brexit and the current search for the next P.M. Various analysists are anticipating that Sterling should increase in value as either of these are closed out. Looking at the U.S. $ / Sterling rate various sources are now contemplating a reduction in the U.S. interest rates as the next move rather than a rate rise. This would obviously weaken the Dollar.

Soya

We are definitely in a weather market currently. Wet weather and the associated delayed planting of corn and therefore possibly soya beans in the U.S. is making the market very choppy. Whilst the U.S is behind with its soya bean plantings there are still many questions with unknown answers such as will the unplanted corn acreage be switched to soya beans (as they can be planted later) or will the farmers take the prevented planting insurance?

If we look at the demand side of things then it’s hard to see how this is going to increase dramatically over the coming weeks as China and other parts of Asia are still struggling to control the spread of African Swine flu and there are now rumours in the market that bird flu may be on the increase again.

Over the past week or so the Funds have again decreased their short positions as they have at least one eye on the U.S. weather and were feeling understandably concerned about their exposure. What this does mean is that if planting progresses well in the current slightly drier conditions then they have plenty of ammunition to push the market lower again.

The Below graphs shows the Jul ’19 contract movements for CBOT Soybean meal futures.

Rapemeal, Distillers and Maize Gluten

Rapemeal values have eased slightly over the past week or so manly on the back of soya easing.
Values are sat around 61% the value of soya for the summer and 63% for the winter which is back in line with its historical values.
Maize distiller’s values have firmed for the summer and winter due to Sterling weakness and the rise in the corn market as Funds look to decrease their shorts due to the wet weather in the U.S. delaying planting
Maize Gluten values have firmed mainly due to the same situation as distillers

Fibres

Hulls have firmed dramatically over the past week or so as shippers struggle to purchase forward volumes at previous values mainly due to a lack of Crusher selling.
Sugarbeet values still remain firm compared to hulls due to the smaller crops this year produced by last summer’s dry conditions. However, due to the generally mild UK winter and reduced offtake there is still plenty available.

Grain, Maize, Wheatfeed, Biscuit meals and Bread

Wheat futures have eased for all positions with the new crop values decreasing more than old crop.
Maize values have stabilised currently as the market keeps an eye on the planting situation in the U.S.
Wheatfeed values have firmed dramatically as more buyers enter the market due to its competitiveness against other products.
Biscuit meal values track the wheat futures market and are therefore looking competitive to physical wheat especially in the nearby positions.

Cereal values historical price graph. (£/t)

Market Prices 06/06/19

All prices Ex Port, subject to change without notice, please ring for quotes.

Red = Price Firmer
Green = Price Lower
Black = Price Same

Rapeseed Meal	Ex Erith	Ex Liverpool
June /Jul	190	198
Aug/Oct	190	200
Nov/Jan	200	208


Hipro Soya	Ex Portbury	Ex Liverpool
Jun / Jul	315	303
Aug / Oct	310	305
Nov / Apr	315	311

Soya Hulls	Ex Portbury	Ex Liverpool
Jun / July	154	154
Aug / Oct	157	157
Nov / Apr	163	163

Whole Maize	Ex Portbury	Ex Liverpool
Jun / Jul	179	179
Aug / Oct	181	181
Nov / Apr	182	182

Wheatfeed	Pellets
Jun / Sep '19	131
Oct / Apr '20	145

Imp Sugarbeet	Ex Portbury	Ex Plymouth
Jun	183	183
Jul / Oct '19	189	189

Maize Destillers	Ex Portbury	Ex Liverpool
Jun / Oct	220	220
Nov / Apr	220	220

London Wheat Futures		Weekly trend
Jul '19	150.55	3.20
Nov '19	151.00	7.50
Jan '20	154.30	6.50
Mar '20	156.75	6.15
May '20	157.75	6.35
Jul ''20	162.05	7.55
Nov '20	150.70	6.50
Jan '21	154.60	New position

The information contained herein is taken from sources we believe reliable, ForFarmers does not guarantee that it is accurate or complete and should be used for information purposes only. Market comments are the opinion of the author, and are not capable nor intended to create any legally binding obligations on either party.