January Review Of The Markets
Grains prices have started the new decade off on the defensive, with dollar-based commodities leading the way with declines of around 10% during the month.
Friday's news that US growth had risen by substantially more than expected in the final quarter of 2009 sent the dollar soaring, to three week highs against the pound and it's best level against the euro since July 2009.
The grains sector is also still struggling to get over the USDA's supply and demand numbers released earlier in the month.
Ideas that commodities would get a boost early in January from fund rebalancing as they shifted into ags, ultimately appeared to have only delayed the inevitable once the USDA numbers were in the market.
CBOT corn showed the biggest decline on the month, falling more than 11%, after the USDA increased it's US crop production estimate for the 2009/10 crop, contrary to market expectations for a fall in output.
March London wheat matched the contract low of GBP96.50/tonne set in September on Friday, whilst November set a fresh lifetime low of GBP103/tonne, before eventually closing at GBP103.90/tonne for a 9% fall for the month.
The acute weakness of the euro has helped prevent Paris futures from suffering quite as badly, with wheat declining 5% on the month, and corn down around 4%.
The euro continues to lose ground on concerns over potential fiscal crises in European economies including Greece and Portugal, and the implications that an enforced financial bail-out would have on the single currency.
Friday's news that US growth had risen by substantially more than expected in the final quarter of 2009 sent the dollar soaring, to three week highs against the pound and it's best level against the euro since July 2009.
The grains sector is also still struggling to get over the USDA's supply and demand numbers released earlier in the month.
Ideas that commodities would get a boost early in January from fund rebalancing as they shifted into ags, ultimately appeared to have only delayed the inevitable once the USDA numbers were in the market.
CBOT corn showed the biggest decline on the month, falling more than 11%, after the USDA increased it's US crop production estimate for the 2009/10 crop, contrary to market expectations for a fall in output.
March London wheat matched the contract low of GBP96.50/tonne set in September on Friday, whilst November set a fresh lifetime low of GBP103/tonne, before eventually closing at GBP103.90/tonne for a 9% fall for the month.
The acute weakness of the euro has helped prevent Paris futures from suffering quite as badly, with wheat declining 5% on the month, and corn down around 4%.
The euro continues to lose ground on concerns over potential fiscal crises in European economies including Greece and Portugal, and the implications that an enforced financial bail-out would have on the single currency.
Commodity Month 31/12/09 31/01/10 Change Change %
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London Wheat Nov10 114.20 103.90 -10.30 - 9.0%
Paris Wheat Nov10 142.50 135.00 - 7.50 - 5.3%
CBOT Wheat Dec10 603.00 541.50 -61.50 -10.2%
Paris Corn Nov10 143.00 137.50 - 5.50 - 3.8%
CBOT Corn Dec10 440.75 390.75 -50.00 -11.3%
Paris Rapeseed Nov10 295.00 288.25 - 6.75 - 2.3%
CBOT Soybeans Nov10 1014.25 911.25 -103.00 -10.2%
CBOT Soymeal Dec10 283.10 260.00 -23.10 - 8.2%
WTI Crude Oil Spot 79.36 72.89 - 6.47 - 8.2%
GBP/USD Spot 1.6184 1.5977 - 2.07 - 1.4%
GBP/EUR Spot 1.1206 1.1523 + 3.17 + 2.8%
EUR/USD Spot 1.4287 1.3961 - 3.26 - 2.3%