Friday, 20 March 2020
Currency & financial markets
- UK interest rates cut to a new historical low of 0.1%, previously 0.25%, as part of measures to try and boost the UK economy.
- Sterling was volatile throughout the day as various news and information emerged. The pound finished the down against the US dollar (£1 = $1.1485) but up slightly against the euro (£1 = €1.0739) – Source: Refinitiv.
- Crude oil prices recovered a bit yesterday as western governments announced further major economic stimulus measures. Nearby Brent crude oil futures rose $3.59/barrel to $28.47/barrel. There were also hints that the US government could intervene in oil markets, potentially by reducing Texan output and stockpiling supplies.
Grain & oilseeds price impact
- UK feed wheat futures May-20 gained £1.35/t yesterday, closing at £159.25/t. The largest gains were recorded early on in the day’s trading, driven by the sharp devaluation of sterling against the US dollar in recent days (read more here). However, UK feed wheat futures eased back slightly little later on in the day as sterling picked up a little against the euro.
- Global grain markets also rose a little yesterday. There wasn’t a clear reason but one suggestion is that it’s a reaction ahead of possible disruption to transport networks in the weeks ahead. There was some suggestion that US grain and soyabean exports could be buoyed by the recent price declines but we feel that seems unlikely in the current climate. For example, the strong devaluation of the ruble would make Russian wheat far more attractive than US grain.
Supply & demand news
- In the UK, broiler and layer chick placings were both up in February 2020, vs February 2019.
- French spring barley plantings remain delayed despite drier weather last week. By 16 March, 40% of the planned area was planted, up from 34% a week earlier but still a long way behind last year’s 97% complete. The forecast looks favourable for the week ahead.
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