Monday Market Briefing - 18th July 2022

Heavy selling on all futures exchanges wiped out the sudden £30 rally and brought us back to the lows of the previous week, this still feels like a floor the market will be reluctant to break through but this next week will test that idea. Prices are of course still very high and the market now faces a bit of a conundrum, clearly, the world is going to face grain shortages later in the coming season, but there is plenty to go around right now as the world’s northern harvests all progress. It’s not the first time we have had that situation but the factors in play this time are much more extreme than anything seen before.

Turkey may have brokered a deal to open up some shipping lanes from Ukraine but all remain sceptical about what this will mean in practice. Ruined port facilities in eastern Ukraine won’t benefit from any deal, but Odessa might, ship traffic sites show 7 bulk carriers currently stuck there since February that could be released – way short of a long-term fix but significant for short-term sentiment if it happens. The prospect of delayed old crop vessels landing in the midst of an early European harvest is obviously a tricky logistical challenge for buyers to negotiate.

Early samples across our region are of spectacular quality, with high bushel weights and strong proteins in the milling wheats. Yields perhaps won’t break records but are above average. It’s such a relief to have a marketable crop again after a string of disappointments in recent years- finger crossed the spring barley follows suit, we expect to see some this week. The UK has old crop balances now getting in the way somewhat, but there are pockets of demand popping up for August. Just don’t expect any early availability premiums this year. Our team of farm samplers will be arriving this week and be heading straight out on the road by the looks of things- give us a call if you would like to check the quality of anything in the barn.

Good luck to all for an easy and successful harvest.