Weekly Grain Digest - 9th February 2018

The COFCO UK Weekly Digest brings together a wealth of global grain intelligence to summarise this week's market drivers for grains and oilseeds.


Sterling trading flat
US Dollar weakness
Dry conditions in the US and Argentina
Market View:
Weather markets in America are the main drivers at the moment, with dry conditions In Argentina causing concerns for soybeans whilst the US central and southern plains remain dry for wheat. This, together with US Dollar weakness has supported CBOT futures with funds drawing in their short positions.

These gains, however, impact the competitiveness of US wheat on the export market and limit the potential for further rises. Also, weather conditions in other major producing countries are relatively benign. The Russian crop has faired well through winter with minimal winterkill threats. Record wheat carryover stocks from this season and the potential for another big Russian crop will maintain pressure on global prices.

Whilst CBOT futures have firmed, EU wheat prices remain relatively range bound due to their uncompetitiveness against Black Sea supplies. EU export forecasts for the 2017/18 season continue to be revised lower which is likely to result in higher carryover stocks into next season. Euro strength has also limited gains for Matif wheat and rapeseed.

Sterling has been relatively flat this week, however, major banks are forecasting further weakness due to a shared opinion that we will see more complexity in Brexit negotiations.

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