Top Trending Commodities: Latest Report

  • The world 2016/17 harvest is expected to be strong for the 4th year in a row and will add to accumulated stocks
  • World prices remain stable due to good supply
  • Despite a good start to the growing season, UK Winter wheat planted areas show a drop of 5% YoY to 1.6m ha
  • EU soft wheat exports have slowed in recent weeks, a drop of 11% on figures for the same period in the 2015/16 season

  • Global sugar prices have weakened since April due to lower global import demand and prospects of larger export supplies from Brazil
  • Rabobank has stated that EU production of processed white sugar in 2017-18 will be 13% higher than the previous six-year average
  • France is expected to emerge as the EU’s largest sugar beet producer when the quota is removed, growing from current 4.3m/T production by 26% to 5.5m/T in 2017

  • Dairy product index has eased at the latest GDT auction dropping by 0.8%. The highest increases were recorded in Milk Fat at 4.4% and followed by butter at 2.9%.
  • A study by European and German milk boards has found that current milk farm gate prices (circa 33.6c) only covers 77% of farmers’ production costs
  • Irish processors have increased milk prices for May, paying between 31.5-32.5c/L, This follows the price increase trend over the last 10 months period. However EU processors generally supported a May milk price of 33 c/L

  • In the last weeks of June, oil has dropped to $45 a barrel, the lowest close since before OPEC agreed to cut supply
  • Output limits for OPEC and other producers are likely to remain for the rest of the year, however OPEC’s compliance with the output cuts has risen to 106% from levels of 90% reported in April¹
  • Oil price range from $50-$55 a barrel had been expected for the rest of the year if production cuts remain in place however this expectation may be revised downwards to $45-$50 based on recent market performance

  • Ireland imports 90% of its oil products and 93% of its wholesale gas from the UK²
  • The ESRI has cautioned that Ireland needs to identify new alternative sources of gas. Kinsale oil field is expected to cease production in the next 5-6 years, and Corrib oil field production is expected to drop to 50pc of its initial levels in the next 10 years³
  • The Single Electricity Market (SEM) which operates between Ireland and the UK was established through a bilateral agreement but will need to be protected if the current  arrangement is to be continued when Brexit negotiations are finalised

  • Butter has made a very strong recovery on the Eurex markets and this sentiment is also reflected on the Ornua Purchase Price Index, with the May figure recorded at 106.8 which shows a slight increase on the steady 105 levels over the previous 6 months 4
  • June GDT Butter prices continue their upward trend hitting $5,768/MT, slowing however to 2.9% growth, and more stable than the very high 11.2% increase reported in the May event
  • The UN Food and Agriculture Organisation have predicted a 1.4% increase in world milk output for 2017, driven by increased production in Aisia and the Middle East

  • The euro has been a strong performer in 2017 and expectations that the ECB will issue a rise in interest rates if the current growth trend continues
  • European economic activity registered its strongest quarter in over 6 years despite the European PMI figure of 56.5 showing a slight slowing in June 6
  • The Pound has weakened slightly in recent weeks ahead of the political uncertainty of whether the Tories are able to form a UK government

  • Europe has demonstrated steady economic recovery which will translate into a strong Euro reaching possible highs of 1.18 EUR/USD
  • Morgan Stanley has reported that US Dollar is expected to gather strength on the back of at least one Federal Reserve interest hike before the year end 5
  • The more stable political landscape across Europe, particularly following the French election result will further support the Euro on the currency markets
  • The US economy remains in a strong steady state with 4.3% unemployment levels and upwardly moving GDP to between 2-3% in 2017 7

 

  • Uncertainty over the formation of the next UK government is weighing on the pound and expectations that it could dip to $1.25 should they fail to form a government
  • Dollar currency activity is currently depending on positive US Personal Expenditure Results to support Fed interest rate increases
  • Initial Brexit negotiation talks have indicated an easing to the harder policies expected which may buoy sterling if Brexit talks give rise to speculation of an exit bill of as much as 100 billion euros ($109 billion) which will impact the pounds strength on the currency markets

Article sources of data:

www.ifa.ie

www.igc.int www.poundsterlinglive.com

www.reuters.com 1

www.agriland.ie 4

www.thebalance.com 7

www.markiteconomics.com 6

www.britishirishchamber.com 2

www.reuters.com

www.independent.ie

https://www.poundsterlinglive.com/eurusd/7042-euro-to-dollar-buy-the-dip-says-morgan-stanley 7

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