Currencies

The £ has dipped slightly this week after the Bank of England announced that they do not foresee any policy change (for which read `interest rate increases’) before 2023, raising questions as to whether the scope for the UK’s recovery post Covid has been over exaggerated.  Having said that, there have been reports this morning that suggest this dip in values, which is a ‘buying opportunity’ as the long term view on the £ is positive. 

Wheat

Grain markets have continued to see significant volatility in the week.  We started off with global corn and wheat markets moving lower as rain moved in over last weekend.  The French Matiff wheat market, corrected by €14 on new crop and Liffe by £12 from their highs, however, the slow up in rain across North America and the continued strong buying of French wheat and soya by China has since pushed prices back up with Nov 21 moving up £4.50 overnight. 

The corn situation continues to dictate the wheat markets, with US plantings rated at 46% good/excellent, pushing markets slightly lower at the start of the week before switching back as the dry situation in Brazil means that they are now forecasting a crop size of sub 90 Mln T. 

It seems to be that we are heading towards a second tight carryout (end of season stocks) years for most agricultural commodities, which means that we are unlikely to see huge downward swings in prices until that situation is rectified.  For the UK, there may be a period of harvest pressure with arable farmers looking to bring in some cash.  However, it is beginning to look as though that downward pressure could be limited with prices moving back higher in the long run.   

Soya

Soya again is being led by corn, but with the soya/corn ratio in the US now looking unfavourable towards soya, it means that there will be further support for prices, despite the fact that US plantings are progressing well and ahead of the 5 year average with decent levels of soil moisture.

In South America, low water levels in Argentina are pushing premiums higher with freight becoming increasingly tight.  We are also seeing continued buying from China despite their ASF issues in the north of the country which were seemingly quantified this week with reports that their pork imports for Jan/Apr this year were up 17%. 

And Finally…
New ‘Hyperloop’ transport system where passengers travel at 750mph in levitating magnetic pods by 2027

Virgin Hyperloop has successfully completed a test run at its facility near Las Vegas.  The protype consists of a 1,640 foot long white metal tubes which are almost air free vacuums and use magnetic levitation with electric propulsion to push through passenger pods. 

A hyperloop trip between New Work and Washington would take just 30 minutes, which is twice as fast as a commercial flight.  The equivalent in the UK would be travelling between London and Edinburgh in less than an hour. 

The owners are aiming for safety certification by 2025 with commercial operations available by 2030. 

Regards,
Kay Johnson & Martin Humphrey