Headlines:
- UK FARMERS‘ BET ON MILLING WHEAT SHOWS SIGNS OF PAYING OFF
UK winter wheat quality, as well as yield, is holding up as harvest approaches its last leg, boding well for farmers’ bet on higher-grade varieties coming good – at a time of growing hopes for milling premiums. With 60% of the winter wheat harvest completed in the UK, the European Union’s third-ranked producer of the grain, the yield is coming in at 7.8-8.0 tonnes per hectare, according to Adas. While below the 8.3-8.6 tonnes per hectare at which yields were coming in at this stage of the harvest in 2015, which turned out to be a record year, results are coming in “close to” farm averages, the consultancy said. Furthermore, on quality, latest findings on protein and Hagberg falling number – a measure of kernel sprouting, and a key milling specification – results are a little ahead of those a year ago, although the weekly specific weight figure is a touch lower.
Summary:
As if the results from the Crop Tour last week were not enough, the combination of favorable weather and a US Dollar return to strength over the past few weeks was more than the grain complex could bear today. Corn was down 4 cents, Wheat was down 11 cents and Soybean was down 3.75 cents. All three finished close to their respective intraday lows and all complex is seeing a bit of an uptick in volume.
The trade was not expecting Soybean to be as weak as it is but today’s move is in line with what we have been suggesting to you for some time now. Perhaps reality is setting in that the forecasted big crop is real. Today Soybean sales of 393k tons to unknown was announced but that did not help today. Additionally the rolling of contracts ahead of 1st notice on Wednesday is perhaps playing a role in this front month weakness.
On the international front, last week on Thursday the impeachment trial of the Brazilian President Dilma Rousseff started. A final vote is expected any day now from the Brazilian Congress. The “unofficial” head count shows that 49 senators will vote in favor of impeachment and 19 will vote against. There are still more than a dozen Senators undecided. Only five more is needed to remove Rousseff from office and have her replaced by Vice President Michel Temer as Brazil’s new president so long as none of the 49 changes their vote. The Brazilian market is of the opinion that the economic policies of Vice President Michel Temer would be better for the struggling Brazilian economy than those of President Rousseff. The currency is at its highest levels in just over a year suggesting that the removal of Rousseff is probable.
