Despite USDA raising both US and global wheat inventories this week, markets have consolidated and moved slightly higher.

Support is spilling over from soy and corn pits, with reports that China has purchased 500,000t of US soybeans in the first acquisition since the Trump/Xi Jinping meeting earlier in December.

Egypt is adding to the trend. It is still purchasing non-US supplies, but paid almost $6/t more than the previous tender amid reports that stocks have declined substantially, especially in the southern port areas of Russia.

European prices are €3-4/t higher on the week, reacting to the firmer Chicago markets. Exports have picked up, mainly due to previously reported weekly shipments being revised higher, but remain 24% down year on year.

France’s farm office this week raised its forecast for end-of-season soft wheat stocks to 2.7mln t, up from 2.5mln t a month ago due to reductions in domestic feed usage and EU exports.

The UK market is up £4/t on the week as Brexit continues to dominate. The decision to delay the Commons vote on the Brexit document and the Theresa May no- confidence vote has led to much volatility in sterling and farm-gate values. Given the continuing uncertainty, we can expect further major currency swings.

As the festive period nears, seasonal logistics have intensified, with the lack of physical supplies and of lorries providing spot price opportunities for growers able to load, deliver, or both.

David Sheppard, Gleadell’s managing director said

"The US/China situation seems to have provided more optimism for potential buyers and therefore higher prices. Wheat values have benefited from firmer soy/corn markets, and suggestions that competitors’ supplies seem to be declining.

"Traders will continue to monitor Russian exports, with most still believing that some curbing will take place, shifting demand to other origins.

"In the UK, the focus will remain squarely on Brexit and its implications."