Monday Market Briefing - 12th August 2024

Despite a week of dramatic news, markets refused to budge from their stubbornly sideways stance all week.  US employment figures point to a slowdown in the world economy which makes it difficult for grain to move positive despite some strong signals that is what is required.  The French wheat crop is now downgraded to a 40-year low, who remembers the 1984 crop ?

UK wheat is nothing special this year but does not appear to be as severely impacted as on the continent. Egypt did decide to act, and in spectacular fashion,  issuing a tender to buy nine months-worth of supply on one day , 3.8 million tonnes. They usually buy in 5-6 week tranches and it’s not clear what exactly triggered this rush of blood - but the tender closes on Monday so we will find out this week how enthusiastic the international market has been in offering such an enormous volume. As is the nature of tendering, the buyer is not obliged to accept any of the offers made, but whatever they do will likely set the tone for this weeks price movement.

News of the arrival of competitively priced Canadian wheat in the UK , along with a significant rise in German premiums, has really thrown a spanner in the works for UK milling wheat trade. Millers are expecting to rely heavily on the German material this year to augment our own, Canadian wheat is of course usually very high protein ( 14-15 % ) and will require leavening with lower protein to create a grist. Obviously, with a low protein home crop again this year, we have plenty of that, but what it all means for the premium structure is impossible to guess today, follow this one closely as your sample results come through.  

Have a good week.