US Bailout package adds more volatility to Grain Markets

The coronavirus pandemic continues to add huge volatility into our global grain markets – both on physical supply/panic buying and on economic factors including oil devaluation and currency exchange. French wheat markets rallied €21/MT last week, back to the contract highs set back in January.

Fundamentally, we are looking at a lower winter wheat area in France, Denmark and the UK, offset by larger wheat crops in Germany and the Black Sea. Strategie Grains revised their 2020 wheat crop estimate for the UK down to 9.8 mln tonnes – implying a wheat yield of less than 7 MT/ha nationally which seems premature at this stage. China has been an active buyer of wheat last week and Saudi Arabia’s planned barley tender was increased from the expected 0.7 million tonnes to 1.2 million tonnes, all for shipment in May-June.

Spring plantings in France are still languishing a long way behind normal, whereas the UK now has a fantastic opportunity to get our spring barley established in good order with a glorious weather week in prospect. Maltsters are noticeably absent at the moment, unsure of the impact of the virus on beer consumption, but if the UK crop emerges in good order it might well attract buyers attention at current values.

Strength across commodity and equity mkts yesterday followed announcements from the US that a deal has been reached in the Senate on a $2 trillion coronavirus aid package. This latest proposal was voted through last night after 5 days of lengthy talks on the stimulus package. From having spent most of yesterday in negative territory, global futures mkts rallied hard into the close last night; Matif +€2.25 and Ldn +£1.50. US grain mkts in Chgo ended the day firmer; +20c on wheat.

UK Grain Markets For old crop, we can place full-spec Grp 1's into domestic homes such as Avonmouth, Tring and W'boro. Prices are still substantially better than compared to pre-Xmas - and cheaper German milling imports again threaten UK values with the recent strength in sterling. Shoreham is busy and we're loading Grp 1's & soft wheat this week. There are lots more wheat opportunities available before the end of season.

Stay safe,

Bartholomews Grain Marketing Team