Economic news dominated the end of the week; whilst there were fears for the release of the latest US jobless figures, the fact that they were worse than most pundits were expecting sent world stockmarkets down, with the FTSE 100 losing 3%. As ever, commodities were caught in the cross fire. Wheat was heading down ’2 on the day, and looking like ending down for the 2nd day in a row ’ until speculators bailed out of equities and back into commodities, lifting wheat to close marginally up on the day. Once again commodities are seen as a relatively safe haven with the threat of further economic gloom. Pundits are again muttering `double dip recession’ as fears grow that the US is unable to shake off its economic woes, and this is shown by the scale of their unemployment and its reluctance to reduce. The UK is not immune from the negativity, as poor UK house figures confirm that our economy is barely recovering.
During this `short week’ UK wheat lifted by ’4 as the slow harvest drags adversely affecting the quality of the UK wheat crop, coupled with fears of declining maize supplies in the US. The US will have less maize to export, so international buyers will have to buy even more Black Sea wheat. US wheat exporters are bemoaning the lack of their export trade as Black Sea wheat has stolen most of the market. The Black Sea trade does not make sense ’ they have committed to export so much that further exports are banned until January, whilst their trade bids up internal wheat prices to meet their export commitments ’ something will have to give.
Soya prices continue to rise a little each week, so that now Non GM soya is priced at ’330 to the mill, a level it last achieved in April, since when it has lifted ’20 from its lows just two weeks ago. That is because soya is now in a weather market, where fear drives direction far more than fact. The US crop is at a sensitive stage, and is susceptible to frost, and if its attention strays from frost, then they can worry about drought, so it is fair to say that the trade is beginning to panic. This has been combined with respected crop commentators reducing the potential yield from last year’s 43 to 41 bushels per acre. Speculators have jumped in whilst the mild frenzy is underway and have increasing their holdings.
This Commodity Report is distributed by Humphrey Feeds Ltd and is provided for information purposes only. While all reasonable care has been taken to ensure that the information contained is true and not misleading at the time of publication, we make no representation as to its accuracy or completeness and it should not be relied upon as such. This report is prepared for the information of BFREPA members who are expected to make their purchasing decisions from a variety of sources without reliance on this report. Neither Humphrey Feeds Ltd nor its officers accepts any liability whatsoever for any direct and consequential profit or loss arising from use of this report or its contents. This report may not be reproduced, distributed or published by any recipient for any purpose without the prior express consent of Humphrey Feeds.
