Farming News - Gleadell's commentary on the wheat market
Gleadell's commentary on the wheat market
David Sheppard, Gleadell’s managing director, comments on the wheat market
Signs of independent strength for US wheat seem to be appearing, with US exports running 25% ahead year on year. A recent sale to Morocco and talk of potential lower US winter wheat plantings are adding support to the market.
In addition, news that Egypt has cancelled its zero ergot tolerance on imported wheat, and re-instated a 0.05% policy on international tenders, may encourage a few more offers. However, given recent behaviour, it takes a brave man to accept this as the final word from the Egyptians re ergot.
EU markets seem undefined, with the recently introduced CBOT EU wheat futures actually trading down for the first time since their inception. It is notable that the Sept 2017 position is now below MATIF, which should be the norm given that the MATIF spec goes to 76/220/11 min from Sept 2017.
The Moroccan sale and Egypt’s ergot policy was the main news affecting EU markets. Talk that the bulk of the Moroccan trade is reportedly to be Romanian based did little to excite markets.
The UK market has firmed over the week, supported by a slightly weaker currency and firmer global values. The rise in physical prices has left the UK less competitive on exports.
The provisional AHDB quality survey showed average proteins at their highest level for 10 years, with falling numbers also reported higher than 2015.
However, as this provisional release is heavily biased on samples gathered in the south and south-east of the country, the average is likely to decline as more samples in the north and west are accumulated. Nevertheless, it does show some quality exists in the main exporting areas of the UK if export opportunities arise.
In summary, it remains hard to get over-bullish given the overall global scenario. There is no shortage of volume, but quality is increasingly an issue internationally.