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

The global wheat picture continues to be a story of plentiful supply with new season crops in good condition as spring arrives in the Northern Hemisphere.

Whilst there are continued concerns over both corn and soy crops in South America (which drove the agriculture commodities market higher in April), Chicago July16 corn is down £1.75/t and soy up £2.50/t over the last week.

However, Chicago July16 wheat futures have given back around £3/t on the week as the influential Kansas three-day crop tour predicts better than expected yields and all US winter wheat ratings improved again on the week.

European markets have also been reluctant to rally as heavy end-stocks and an improving new season outlook weigh on markets.

The UK physical old crop market and futures have, to a degree, become dislocated from one another. May16 LIFFE (expiry 23 May) gained £2.60/t on the week, but physical delivered markets saw minimal gains.

New crop demand generally remains depressed on expectations for heavy carryover stocks and plentiful new crop production.

In summary, weather stories continue to create uncertainty and volatility in the short-term with South American crop issues to the fore. However, the fundamental global wheat picture continues to improve with US crop ratings, Ukrainian crop forecasts and European yield estimates all generally improving.