Week Beginning 22nd June 2016

The London LIFFE wheat future for July 2016 closed at £108.95/T on Friday evening (17th June) – £2.65/T lower than the week previous. In opening trade this morning, the future is unchanged.

Feed wheat for July collection is offered at £110.00/T ex-farm, feed barley is valued in the region of £100.00/T ex-farm for spot collection.


As for new crop values, the London LIFFE wheat future for November 2016 closed at £120.40/T on Friday evening following an extremely volatile week – this is -£2.20/T lower than the week previous. At the beginning of the week, the future was valued in the region of £125.00/T+ which brought offers in the region of £120.00/T ex-farm for September collection. By Tuesday afternoon the future began edging lower and continued to do so for the rest of the week. In opening trade this morning the future is valued a further -£1.70/T lower at £118.70/T.

Feed wheat for September collection is offered at £112.00/T ex-farm this morning with extremely limited buyer interest – I imagine this trend will continue this week until the result of Thursday’s referendum is firmly out of the way.


According to the latest online polls for Opinium and YouGov, the results of which were released on Saturday evening (18th June), both sides are neck and neck with both remain and leave on 44%, with 12% of voters still undecided with less than a week to go.

As for the BBC’s latest poll, the results of which were also released on Saturday 18th June, the remain vote has a slight advantage with 45% – marginally ahead of the leave vote at 42%. Again, a fairly significant proportion of voters (13%) remain undecided. The BBC added that “perhaps this latest poll suggests that the momentum enjoyed by the leave campaign over the last couple of weeks has, for the time being at least, stalled”.


It has been an interesting couple of weeks tracking the London wheat market ahead of the Referendum – results of daily online polls, television debates and currency movements have all added volatility to the market. There are no guarantees that the outcome of the referendum will bring any change to the market but general market opinion would suggest that the success of the leave campaign would result in the weakening of sterling and a move upwards for the grain market. On the other hand, a remain vote should ultimately strengthen the pound, making UK grain uncompetitive within the global market. In this situation, the value of UK wheat would decline.

The above is of course extremely theoretical and there are no guarantees either way. Regardless, Friday’s trading activity could make for some interesting viewing!


Meanwhile, in a quarterly crop report released towards the end of last week (as reported by AHDB), the Australian Bureau of Agriculture have lifted their forecast for wheat production for the imminent 2016-2017 trading season to a five year high at 25.4 million tonnes. This is a 1 million tonne increase on the most recent forecast from the Australian Bureau and is 400,000/T higher than this month/s USDA figure.

Recent rains are believed to have boosted the outlook for Australian winter crops over the last few weeks following the drier than normal conditions experienced earlier this year, “which significantly depleted soil moisture levels”.

AHDB have added that the rains have “come just in time for the winter planting period and have resulted in very favourable planting and early growing conditions for winter crops”. Furthermore, current forecasts indicate a wetter than average winter for the months ahead across the majority of the key winter wheat growing regions.


Elsewhere, both old and new crop OSR values have declined significantly over the last week or so as buyer interest wanes ahead of Thursday’s Referendum. The pound is valued at 1.2906 against the Euro this morning; this time last week the pound was valued at 1.2585 against the Euro.

Old crop OSR values declined £11.00/T towards the end of last week and have traded a further £6.00/T lower this morning – July movement is currently offered at £260.00/T ex-farm.

As for new crop values, £260.00/T is offered for as available movement at harvest, whilst £270.00/T ex-farm is offered for October/November collection.

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