Without going into too much detail as I am sure many of you are already becoming tired of the aftermath, the first item on this week’s agenda is obviously last week’s general election. Theresa May’s intentions hugely back-fired last week as her early call for an election ended with a hung Parliament which has left the Conservatives without a majority Government ahead of next week’s Brexit negotiations.
Following on from last year’s Brexit vote and the US election, “political forecasts” head of last week’s election seemed more irrelevant than ever before.
However, most would have agreed this time last week that although Mrs May’s decision was perhaps a little risky given her relatively poor campaign, the Conservatives would just about scrape a majority vote. They were in fact, incorrect.
On Friday morning, the value of the pound against the Euro tumbled by almost 2%. By lunchtime it had mostly recovered. The value of the Euro against the US Dollar also declined as further political uncertainty looms.
As Mrs May returned to Westminster this week to discuss a potential DUP deal and defend her position as Prime Minister, the Grain Markets are extremely quiet.
Looking ahead, huge political uncertainty looms which usually encourages either volatile trade or a distinct lack of trade altogether.
Old crop feed wheat for spot collection is currently valued in the region of £145/T ex-farm.
As for new crop values, £135/T ex-farm continues to be offered for harvest collection. Just £10/T now separates the old and new crop positions – many farmers believe that this is because of a lack of old crop supplies whereas in truth, the trade is able to import at these levels and a last-minute shortage is unlikely.
Meanwhile, Last week’s World Agricultural Supply and Demand Estimates (WASDE) from the US Department of Agriculture (USDA) didn’t contain any major changes and has therefore had a limited impact on the market.
One important thing to take note of is that despite the recent hype regarding the “poor” weather over in the US, the USDA have made no changes to wheat production for the upcoming 2017/2018 trading season.
Also, it is worth noting that European wheat production has been forecast slightly lower at 150 million tonnes due to a smaller estimate for the German crop.
The adjustments are however minimal and have done little to alter trade opinion. Next month’s report should make for an interesting read as the Northern Hemisphere harvest finally gets underway.