GRAIN MARKETS

Jonathan Lane, ADM Agriculture’s head of grain trading, comments on the wheat market: USDA’s initial assessment of global supply and demand for the 2020/21 season portrays an overview of more than abundant supplies. Global wheat production and stocks (excluding China and India) show little change year on year. But the potential of a huge uplift in US corn supply to the highest level for over 30 years, due to the massive increase in crop area, together with ample amounts of global barley will continue to provide resistance to higher prices. Although the report was much in line with trade expectations, its findings, combined with concerns over a slowing US economy, prompted active commodity selling, pushing US prices down $5 on the week. EU (Paris) new crop futures are down €2/t on the week, falling in line with the decline witnessed in the US. Conversely, UK (London) new crop futures are up just over £2/t, supported by a weaker currency as confirmation of an ailing economy hit the value of sterling. UK crops also need rain, but there is little or none in the forecast. UK prices are already at or close to import parity, so we will need international prices to move up, or sterling to weaken, to see much better domestic prices.