Jonathan Lane, Gleadell’s trading director, comments on the OSR market

Currency continues to have a significant impact on UK farm gate prices as the world tries to work out what the prospect of Brexit might mean for the UK economy and on the value of sterling.

The on-going uncertainty created by the fallout from the vote and the vacuum created by the current domestic party political situation pushed sterling to 31-year lows against the US dollar and three-year lows against the euro. 

This sharp drop in sterling has cushioned the UK farmer from the reality of the global market. Despite a supportive USDA report last week in which the planted area fell below trade estimates, a much improved weather forecast has triggered some funds to start exiting their long positions and the CBOT soy market has fallen about $40 in the last few days of trading.

The Matif has followed lower and, with good yields being reported from on the ongoing harvest in Eastern Europe, we wouldn’t be surprised to see some additional downward pressure once the combines start rolling in Northern Europe.