- We have seen a huge anomaly in the market today with what can only be described as a “knee jerk” reaction to the Ukraine situation, more so in MATIF wheat than in London (see the jump in Paris premium over London on a Stg adjusted basis). In France, Germany and Black Sea regions farmers are “finding” yet more wheat to sell, and the Ukraine crisis is forcing “shorts” out of the market before the long Easter weekend. There would appear to be plenty of old crop wheat, yet if Ukraine implodes over the long weekend material will be scarce as next week begins. Hence todays leap in prices. Maybe, just maybe, if Ukraine remains on a level playing field over the weekend we will see the market give back its recent gains.
- If weather is normal, whatever that is, both EU and Black Sea region crops will be big, and added to what might yet become understated old crops given what is still around and available for sale. Yet today we see elevated prices on the back of the political situation. Something has to give – and before long.
- In unrelated agri news, the US’s NASS reported 3% of the projected corn crop was planted as of mid-April, a full 1% ahead of last year, yet 3% behind the five year average. Despite yesterday’s concerns over cold weather and damage to wheat, it was reported that overnight low temperatures were insufficiently low to hit the threshold to cause damage in jointing or late tillering wheat crops. The central US forecast looks more favourable for late April and early May as far as planting is concerned. In addition, beneficial forecasts are in place for further precipitation across the dry western Plains later this week. Corn seeding should move ahead rapidly – remember the massive pace of planting last year in a short window of opportunity!
- US winter wheat condition was reported at 34% good/excellent, behind last week’s 35% and 36% last year.The proportion of the crop rated poor now stands at 32% compared with 29% last week and 31% last year. Spring wheat planting stands at 6% compared with 5% last year.
- It would appear the question on many lips tonight is, “Should we trade improved weather, or should we trade rising Ukrainian tensions?” Our leaning, right now is towards trading the weather, although we have been accused of sounding like a cracked record more than once in recent weeks!