Arable Outlook

Currency continues to support UK cereal and oilseed prices.  The domestic market is just about being entirely driven by the weakness of Sterling.  Latest forecasts from USDA show global cereal supply higher than consumption for the fourth year running.  But lower EU production and weak currency is helping to insulate domestic prices.

Globally, the US wheat (and corn) markets have risen this month, mainly due to quality concerns in Canada & Australia and funds remaining short.  Closer to home, spot demand for wheat from merchants remains strong, meaning nearby farm prices are looking attractive.  But both EU and UK markets have been quiet.  British farmers have become reluctant sellers, expecting prices to rise further on the weak currency.

The lack of farmer selling is also partly responsible for the increase in Matif rapeseed futures.  Snow storms in Canada are affecting the canola crop and concerns over the palm crop has seen the vegetable oil market firm, helping to lift oilseed prices.  In the UK, prices continue to firm as merchants look to cover pre-Christmas positions.