Currencies

The delay in the agreement of Biden’s budgetary plans has weakened the $, and even the subsequent agreement has not shaken the concern about the strength of the $. Had the budget measures not been agreed, then the US debt default would have serious ramifications for markets across the globe, but for agricultural commodities this would have been seen as a bearish factor.

Wheat

The question with wheat now appears to be, how much lower could it go, and will the switch to new crop be the trigger to level prices? It is clear from the discount now on old crop, that there is a bid to move volume ahead of harvest. The Ukrainian grain corridor has been extended, which has been viewed as bearish here. Had it not been extended the market would have been seen this as a bullish (the market will rise).

European crop ratings this week are still very good but the long range weather forecast needs to be monitored as it suggests another summer like 2022, i.e. hot, which would impact on yields. Closer to home though, although late, the spring seed appears to have all been drilled now and if anything, could now do with some moisture.

The longer range Supply & Demand is still in balance but tighter than this season has been, even with the historically large carryout’s factored in. At the moment the strategy for arable farmers would be that, ‘rallies are a `sell’ unless we see a real weather issue’.

Soya

Soya prices are still falling, but slowing due to concern over dryness for El Niño weather patterns could impact yields in Malaysia which will impact palm oil availability as well.

However, the flip side of that, favourable weather in the US and record levels of plantings means that the market will struggle to hold any sort of long term price rally. 45% of the US crop has now been planted, well above the year on year average of 36% for this time of year. The final Brazilian crop is now being reported at 155.66 MlnT vs the average of closer to 125 MlnT, which will also add to a bearish long term sentiment if the US crop continues well.

Organic

Organic prices appear to have found a level at the moment which is generating new crop trade and origins are likely to be Romania and Kazakhstan this coming season.

The sunflower supply situation has now rectified itself which has levelled those prices back out again.

India soya suppliers are in the process of re registering for their organic status after the EU removed all bodies from their approved organic suppliers, which meant the UK followed suit. This is likely to be August/September before we know if any are successful which means it is more than likely soya supply will switch to Chinese certainly in the short term. This means lower quality protein which could bring in some other alternative protein sources into organic diets in order to be able to balance that.

And Finally…

Could this ruin your summer on a British Beach?

We are used to global food companies moving production away from the UK, whether it is Nestle moving Rountrees chocolate, or Bendicks of Mayfair (previously made in Winchester, now in Czekslovakia), but has Cadburys gone just too far?

Ice cream van owners have been complaining about the quality of flakes now that production has moved from Birmingham to Egypt.

Apparently it is now just too crumbly, and any pressure applied on it, to push it into a 99 means that the humble flake dissolves – that is assuming that enough whole flakes can be taken out of the box!

Apparently there are 144 flakes in a box that are used by ice cream vans, and vendors are complaining that up to half are having to be thrown away!

The parent company of Cadburys, Mondelēz are trying to resolve the problem – well hurry up!

Mind you, if they want anyone to eat the 50% that are too crumbly……