Monday Market Briefing - 12th December 2022

Grains showed some signs of life this week , enjoying a couple of positive days before eventually settling lower as the latest WASDE loomed late Friday. Was this the much fabled ‘dead cat bounce’ or the first signs of a rebound after a lengthy sell off? We think probably the latter. The USDA report, as is typical of them,  decided to wait for the facts and not try to anticipate expected reductions in Brazilian corn and Argentinian wheat output, they left their numbers more or less unchanged for the time being. All will become clear in the New Year.

The Chinese Government appeared to yield to domestic pressure by relaxing strict COVID lockdown measures. The reduced economic activity associated with that lockdown has been a key factor in driving prices lower so we expect renewed buying activity from China to be a factor in post-Christmas markets. The burning question in the New year will be, at what point do forward prices start to look like a good bargain for buyers when weighed against all the future risks we face ?

All that can wait, home activity is still quite keen in nearby positions. We have at least six malting barley vessels to load between now and late January so early New Year movement will not be a problem. There are signs of life on oats where feed demand might clear the surplus it seems ( if you need a reminder of just how good this UK crop is - 60kg feed oats anyone ? ).  All grades of milling wheat from group 1 to softs have demand as well so there’s plenty to get stuck into.

Have a good week.