After falling to a near 2-month low last week, Nov-19 LIFFE feed wheat attempted to recover amid a struggling Sterling although the £149.50 mark still acts as a strong ‘technical resistance’. The Brexit saga continues with the ‘Boris vs Jeremy’ fight in full swing although the two Conservative opponents agreed they would not accept the ‘future ex’ PM Theresa May’s Northern Ireland backstop terms. It translates into a heightened risk of a no-deal Brexit which pushed the Sterling below the $1.24 level for the first time since April 2017 – a good news for UK grain exports but not so much for fertiliser imports.
The winter barley harvest is now making rapid progress in the eastern counties where yields are generally reported to be good and continue to put pressure on the physical market with feed barley (ex-farm) hovering over £120/T for harvest movement compared with more than £135/T last year. For wheat, crop conditions remain mostly favourable across the country with vegetation density better than both last year (unsurprisingly) and average. Consequently, the spread between Dec-19 Euronext milling wheat and Nov-19 LIFFE feed wheat is now trading at a 3-year high of ~£16.50/T (Euronext over Liffe) for this time of the season.