The six-month bull market in crops continue with sugar, corn and not least wheat being the latest markets receiving a strong bid. Overall the Bloomberg Agriculture Index has already risen by 6% this year thereby contributing to the 43% gains seen during the past six months.
Recently the grain market has received most of the attention. First corn which following the latest WASDE report leapt higher after the US government cut its supply forecasts by more than investors had expected to a seven-year low.
Adding to the general strong sentiment has been the latest moves from Russia, the world’s largest wheat exporter, to reduce shipments in order to curb a rise in domestic food prices triggered by the Covid-19 crisis. After announcing a €25/t tax on wheat exports from mid-February to June they went one further by raising it to €50/t from March with the added risk of being extended beyond June.