Morning Brief – World Wheat

World Wheat

Funnily enough while Ukraine’s wheat exports have fallen 32% and 20 million tonnes lie rotting in grain silos, Russian wheat exports are up 18% and the Russian Treasury has benefitted to the tune of $1.9 billion in extra wheat taxes. Russia has overtaken both Canada and the USA as the world’s largest wheat exporter and at the same time squeezed the price. Hence the weekend news of the efficacy of the Russian naval blockade of Ukraine and the reporting of the lack of a meaningful Ukrainian navy to counter the Russians. Meanwhile countries heavily dependant on Wheat imports from Ukraine and Russia such as Turkey watch anxiously USD/TRL 16.27.

Markets

10 Year Government Bond Yields start the week at key levels: US at 2.74, UK at 1.92, Germany at 0.97 and Japan at 0.23. Gold stands at $1852 and Oil at $115. Currencies are poised for further volatility with GBP/ USD 1.2630 and GBP/EUR 1.1760.

When Bad News=Good News

In the topsy turvy world of the US markets that we find ourselves, the fact that growth is missing targets constitutes good news as the thinking goes that that means that the Federal Reserve may not have to raise rates so much after all. That combined with some faint cheer on the inflation front is enough to put a spring in the step of the market over the weekend. EUR/USD 1.0725

Kenny Rogers

Following a bomb threat at the Albert Hall, 3,000 of country singer Kenny Rogers’ most ardent fans were evacuated this day in 1999. No bomb was found and needless to say, Kenny’s fans being a well behaved and mature bunch, no-one panicked and so there were no injuries and the fans meekly went home having accepted that the concert was off. It’s very long and Kenny Rogers crams a lot in to the lyrics, so here is a small part (honest) of one of his greatest songs, The Gambler from 1978:

On a warm summer’s evening
On a train bound for nowhere
I met up with the gambler
We were both too tired to sleep
So we took turns a-starin’
Out the window at the darkness
The boredom overtook us
And he began to speak
He said, “Son, I’ve made a life
Out of readin’ people’s faces
Knowin’ what the cards were
By the way they held their eyes
So if you don’t mind my sayin’
I can see you’re out of aces
For a taste of your whiskey
I’ll give you some advice”
So I handed him my bottle
And he drank down my last swallow
Then he bummed a cigarette
And asked me for a light
And the night got deathly quiet
And his face lost all expression
Said, “If you’re gonna play the game, boy
You gotta learn to play it right
You’ve got to know when to hold ’em
Know when to fold ’em
Know when to walk away
And know when to run
You never count your money
When you’re sittin’ at the table
There’ll be time enough for countin’
When the dealin’s done

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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