A quiet week in the Ag markets as harvest across the nation all but wraps up and trade quietens down.

Abroad has been an interesting one however, particularly the US. President Trump has now been in office for two years, and finally seems to be making some progress on a trade deal with China, sparking a late week rally in soybeans. The US government shutdown has continued however, and is now the longest shut they have had. If Trump does something, he does it well.

The US stock market doesn’t seem phased, with its best start to the year since 1987. Some bulls are pointing to this being a big positive, while sceptics are quick to remind us that 1987 is not a good year to benchmark against. A 12% rise in January alone, followed by the biggest ever recorded daily loss on Wall St of 22% on 19th October.

Then there is Brexit, and all the hype and drama involved in that. We’re now hearing that agricultural trade maybe except from the deal.

I mention all this, not because I want to scare anyone, but because there is every likelihood that 2019 will see greater volatility than recent years. We’ve already seen this in currency markets in the last 3 weeks, and financial markets will probably be no different. Grain futures markets are not isolated from the volatility, with cross hedging and risk diversification high on traders minds.

The international wheat markets seem to be regurgitating the same old stories. Exports and fresh sales from the Black Sea easing; production issues in South America; and poorer production in Eastern Australia. However, the market is clearly rangebound and will likely remain so until we see some fresh headlines. I suspect we’ll see some volatility once the USDA come back on deck and release fresh S&D data.

The feed market space appears to be hotting up again. This is very much driven in the short term by supplies drying up post-harvest, and those remaining supplies seeking higher numbers. In the long term, we are also seeing more bullish headlines. Estimates from Brazil on Friday show ethanol production from corn increasing 35% this year. Total ethanol production is slightly lower, but they are estimating a considerable switch from sugar cane to corn due to a move higher in sugar prices.

Canola prices have become a little more talked about this week. As I have been saying for some time, demand locally has been low, but expected to increase due to greater exports through February and March. In other Ag news around the world, ADM have just signed up the purchase of Glendel, one of the UK’s largest trading houses. They purchased the remainder of Toepfer a couple of years ago, increasing their presence in Australia considerably. Now the push in the UK sees them cement their place as a major player in all corners of the world.