Currencies
The £ has continued to lose ground, moving as low as 1.35 before recovering to around 1.37. The threat of yet more travel restrictions for UK tourists coupled with a deflated view following the Bank of England’s meeting meant that some of the long positions which has been held for £ were reduced.
The Bank of England meeting did increase the forecast for GDP over the coming year but it has been in line with expectations and with the levels staying static for so long, it prompted investors to liquidate and move on. Of course the expectation is still that if we lift restrictions in the UK before 19th July then we can expect to see a rally against both the $ and the €.
Wheat
Grain markets have very much been a story of two halves this week. US markets began moving lower with the continued cooler temperatures across the Midwest and Great Plains signalling rain. In Europe, reports that harvest would be slightly delayed were seen as positive and beneficial for yields to take advantage of the later rains. In the UK, new crop fell back below £170 for the first time since February. Interestingly, we have now had a range for new crop prices between £195 in April 2021 and £145 in August 2020.
The USDA report on Wednesday switched the markets back round, coupled with the Independence weekend in the US which always attracts some risk premium. The report reduced corn acreage to 92.7 million acres which was lower than analysts predicted but, was still up on last years figures. The sharp reactions to any sort of adverse news just serves as a reminder of how much we are still in this fragile balance of tight old crop carryout figures and good, high yield harvests are very much needed.
Barley harvest in the UK is likely to start around 10 days later than average as following the period of rain, crops could do with some last minute heat to finish them off. The differential still stands at around £15-17 to wheat, allowing for the fact that a percentage will be switched for feed back into wheat.
Soya
Soya has followed the same trend as grains this week. The USDA report put acreage at 87.5 million acres versus the 88.9 million acres expected and the magic 90 million acres everyone was hoping for. Stocks were also lowered to 766 million bushels versus 787 million bushels expected. Again, all this does is put the emphasis on the fact that there is no room for any adverse crop deterioration this season so we find ourselves back watching the weather. Rain is forecast in some growing areas which is promising, and we have still have time before that critical August pod development phase.
And Finally…
The Billionaire Space Race - Richard Branson aims to beat Jeff Bezos into space by 9 days with Virgin Galactic space flight due to launch 11th July.
Richard Branson made the announcement that he would be one of the six crew members on board the flight due to launch from New Mexico in the hope that it will signal the start of his commercial space flights.
Virgin Galactic made the announcement on Twitter in a very flashy video where Branson labels himself as ‘Astronaut 001’. The project has been 16 years in the making and hopes to offer passengers the experience to fly high enough into space to be able to view the curvature of the earth, experience weightlessness and return to earth in around a 10 minute trip. So far over 600 people have reserved tickets when they go into operation at a cost of £250,000 per ticket.
The race then between Jeff Bezos and Elon Musk with Bezos announcing his ‘Blue Origin’ flight will be due to take place on 20th July. Musk has made his intentions to fly into space and perhaps even ‘die on mars’ very clear but so far, his company has launched unmanned rockets into space and in 2018, they launched their first rocket with the intentions that it will orbit mars, 140 million miles away.
Regards,
Kay Johnson & Martin Humphrey
