US prices are up about $2/tonne on the week, hitting 4-year highs, with values supported by ongoing strength relating to rising EU / Black sea prices.
US markets generally took the signing of Phase One of the US/China trade deal in its stride, initially moving lower as reports from China stated, ‘they will only buy what they need, and when they need it’.
Argentine wheat shipments to Asia are poised to climb to a record high over the coming months as a drought curbs Australian production, and Black sea inventories tighten
Precautions are being taken in China as the Government attempts to control the outbreak of a new coronavirus that threatens to spread across the country, raising concerns on the financial markets and its potential impact upon the economy
Export prices of Russian wheat reached their highest level since the marketing season began, due to demand from major customers and risks relating to Russian proposals to introduce an export quota
EU prices are up about €1.50/tonne on the week touching a near2-year high, supported by good international demand, with little signs that the trend would ease in the coming weeks
French prices continue to firm as the ongoing transport strikes over pension reform cripples rail services, and rolling stoppages by dock workers leaves exporters struggling to get supplies to export and domestic locations
EU exporters are seen switching cargoes away from France due to the logistical problems, to either Germany or the Baltic states, although this is also seen inflating their regional premiums as an already heavy export program has reduced available supplies.
UK prices are down 50p/tonne on the week, as slightly firmer global markets are negated by a rise in the UK£.
Much focus has been centred on UK planting progress – or the lack of it – over the past week or so of dry weather. Currently the dry period looks like ending, at least for a while, next week so progress may be only possible in the short term.
Imported maize continues to be a competitive option for UK compounders for the 2020/21 winter feeding season and this remains as a threat to UK wheat prices next season.
Likewise, UK millers, who are well aware that milling wheat imports will almost certainly increase significantly next season, are monitoring the price of imported German A wheat, and other wheat from other origins, which will then set a cap on UK milling wheat prices.
Short-term, demand isn’t going away, and prices will stay supported. Long-term the market will be driven by weather, and by when the farmer ‘brings the wheat to market’ especially across much of the EU and Russia.