Monday Market Briefing - 4th November 2024

All about the US Election this week, with the only certainty being the huge uncertainty over the result.

A Trump victory probably entails greater disruption for the global complex, his pledge to stop the Russian/Ukrainian war overnight could be the biggest curveball. How this this happens is anyone’s guess but perhaps the only likely method would be stopping all aid to Ukraine and let Russia stroll back in, a heinous prospect but any permanent stop to hostilities would wipe out any war premium this market still holds onto.

Otherwise, we are likely to see some big currency movements and perhaps some changes to the US corn for ethanol mandate if it’s a Republican victory, and if it’s a narrow Harris victory will could see weeks of disruption if the looser doesn’t accept the result.

Wheat markets seemed to have found support but seems to have little appetite to make meaningful gains. The global wheat complex was the upside leader last week , with struggling US winter wheat conditions due to recent dryness is the driving force. The USDA rated 38% of the US winter wheat crop in good/excellent condition, below analyst estimates in a Reuters poll of 47% and the second lowest for this time of year in USDA records dating to 1986.

At home the weather remains gloomy but dry, so we are likely to see plantings catch up here and in continental Europe. At the moment London Nov 25 wheat futures and Paris Dec25 wheat futures are practically at parity. If the intended plantings happen in the UK, and Imports continue at the recent pace we are looking at a big carry out once again and a 2mmt plus exportable surplus, a very challenging prospect which would force UK wheat to trade at big discounts to price itself into export market.

Despite a monster US Soya crop EU OSR markets continue to rally as the global veg oil market gathers momentum. UK values have been further accelerated by the post budget Sterling devaluation.

Best wishes for the week.