Monday Market Briefing - 28th October 2024

UK grains finished on a weaker note last week as we saw the first tender date for London Nov 24 futures arrive. This is the process where a futures contract, in existent for up to 2.5 years and traded numerous times can be transferred into an actual physical contract that can be collected and delivered into a feed mill. 

 The size of the tender and price action is often very telling of the state of the trade. In this case the longs, traders who have bought the contract at some point have decided they don’t want physical wheat so they exit their trades before they are obligated to own actual wheat. This results in seller pressure/weakness and is another reminder of our difficult wheat S&D dynamic. It also exposes the next big futures position May 25 potentially to a downward protectory, especially considering plantings this autumn, domestic demand and void that is export markets.

 However, in the meantime farm selling remains sporadic with short term finite demand satisfied and in the case of milling wheat the next open delivery month is slipping all the time.

 UK milling wheat is finally moving into a position where it is price competitive against German imports. Good news of course but unfortunately UK millers and their customers have got used to a higher inclusion of imported wheat and with purchases in place well into the new year we aren’t expecting a surge in demand for domestic supply.

Global markets remain quiet and it feels like we’re entering the usual post-Thanksgiving/winter quiet period. The US corn harvest is romping ahead and hopefully improved weather prospects in mainland Europe will allow the maize harvest to be wrapped up and wheat plantings to catch up.

Have a good week.