EU Grains MIxed, Weighing Up Brexit Implications

01/06/16 -- EU grains traded mixed, with Jul 16 London wheat down GBP0.20/tonne at GBP105.90/tonne, Sep 16 Paris wheat unchanged at EUR164.25/tonne, June corn was up EUR1.75/tonne to EUR173.50/tonne and Aug 16 rapeseed closed EUR2.50/tonne lower at EUR374.25/tonne.

Sideways trading is/was the name of the day, and looks set to remain so now until we get stuck into harvest 2016 or a proper US weather scare.

There's some talk of the French labour dispute spilling over onto the grains sector, but no sign of that happening just yet.

If anything it's excess rains that are more likely to be a problem there.

The pound closed back below 1.29 versus the euro last night as the UK Brexit referendum approaches.

The UK's economy would suffer "a large negative shock" if it left the EU, the Organisation for Economic Co-operation and Development said last night.

Whilst plenty are ready to tell us what would happen if we did or didn't vote to leave, few are focusing on the likelihood of that happening. Most bookies are offering only around 2/7 for that, suggesting that this is a pretty unlikely outcome, so fretting over the consequences of an even that's unlikely to happen could be a bit of a waste.

A Reuters survey, which places greater weight on forecasters with a higher rate of accuracy, estimates the GBP/EUR at 1.2550 a month from now, to 1.29 in 3-months, over 1.32 in 6-months and 1.3650 a year from now.

That suggests weaker London wheat relative to the Paris market for the coming 12 months.