David Sheppard, Gleadell’s managing director, comments on the wheat market

US wheat prices are up slightly on the week, supported by a weaker US dollar, bouts of fund short-covering and continued concerns over 2016-17 wheat quality supplies from Australia and Canada.

In addition, talk of drier conditions in the US southern plains and the likelihood of another drop in US winter plantings has added support.

EU markets have traded slightly lower on the week, although the MATIF/CME spread has widened. Again, no vessels are loading in Rouen and none are destined to be, showing the current lack of demand for French wheat.

Black Sea wheat prices continue to firm, with little tonnage being offered from the Ukraine as corn exports ramp up. Russian exporters are trying to scrape together export commitments and interior prices show no signs of receding, although the recent fall in crude to a five-week low has pushed the value of the ruble lower.

UK markets are also slightly higher on the week, although news that the High Court has ruled that Parliament must vote on whether the UK can start the process of leaving the EU has seen currency spike higher and futures move lower. The decline of sterling following the vote to leave has been the major driver of the rise in the UK market. The ruling will probably delay the Brexit timetable, leaving the potential for sterling to strengthen, which could pressure UK ex-farm values.

In summary, as we enter November, the sentiment appears to have shifted from one of increased demand to one of addressing global over-supply. US and UK interest rates remain unchanged, but the uncertainty of the US election and the UK High Court ruling, plus the recent slowing of crude oil, could mean today’s ex-farm values mark an opportunity for growers to increase their selling activity.