July 18, 2018

EU wheat snaps a 4-day winning streak amid a dearth of fresh news

  • Despite a supportive Sterling which flirted with the $1.30 mark ie its lowest in 10 months with inflation steady at 2.4% in June, UK wheat snapped a 4-day winning streak in decent volume with harvest set to make a proper start.
  • In the southern part of the UK, winter barley yields continue to come off better than expected although the drought had for sure a detrimental impact which is still to be fully assessed. On the physical market, feed barley is now trading above the £150/T mark for early winter delivery.
  • Matif wheat finished lower for the first time in five trading sessions with combines advancing rapidly in the northern part of France.
  • In the week ending July 13th, investors cut their net long position in Matif wheat by more than 6,200 contracts to 28,483 and commercial participants reduced their net short position from 78,183 contracts to 69,072.
  • According to the German Farming Association, the country’s 2018 winter barley is set to decline nearly 20% from last year to 7.3MMT due to persistent dryness. Forecasts for both wheat and rapeseed were unavailable because of the extent of the drought.
  • Ukraine has already harvested about 12.5MMT (avg yield = 3.3T/ha), 2.8MMT of winter barley (avg yield = 3.5T/ha) and 0.9MMT of spring barley (avg yield = 1.9T/ha) from about 55% of the 9.6Mha total area.


  • In the wake of a recovery in palm/crude oil prices and ongoing concerns re the 2018 EU crop, matif rapeseed futures continued higher for a 3rd consecutive session with the Nov-18 contract targeting its technical resistance level of 369€/T.
  • UK OSR yields remain mixed with some farmers reporting a 4.5/5T/ha crop i.e above average whereas others argue for a disappointing crop below 3.3T/ha. Domestic prices remained supported by the weakness of the Sterling with Nov-18 matif contract in GBP set to settle at its highest in 8 months.
  • Thomson Reuters analysts lowered their 2018 EU rapeseed production forecast to 20.7MMT due to excessive moisture/prolonged dryness respectively in France and northern Europe.
  • Private US exporters reported the flash export sales of 199.5KT of soybeans for delivery to Pakistan during the 2018/19 marketing year.