Week Beginning 18th April 2017

Following on from an Easter Weekend of typically average Bank Holiday weather, a good amount of vital spring land work has now been achieved here in Yorkshire. The majority of spring crops are now well established, or “nicely poking through” as most local growers have commented and the weather forecast is promising as I believe the majority will welcome a little rainfall.

Winter wheat crops are also in a very good condition and have certainly benefitted from the mild spring weather and plants are certainly on the move now that we are beginning to see some sunshine.

OSR crops look particularly well and whilst some are concerned that crops are flowering too early, most are pleased with the level of disease control and overall cleanliness.

The London LIFFE wheat future for November 2017 closed at £139.25/T on Thursday evening before the start of the extended weekend and has commenced traded this morning a further £0.50/T lower.

Following the announcement that Theresa May is to call a general election on the 8^th June to ensure “certainty and stability” in the wake of Brexit, the old crop wheat market has declined by £2.30/T as the pound strengthens.

According to the BBC, Mrs May has accused other political parties of “game playing”, adding that this “risks our ability to make a success of Brexit and it will cause damaging uncertainty and instability to the country. If we don’t hold a general election now, their political game-playing will continue and the negotiations with the European Union will reach their most difficult stage in the run up to the next election”.

Feed wheat for spot collection is STILL valued in the region of £150.00/T ex-farm and the current stand-off between farm-sellers and end-users is becoming rather tedious. The market has become extremely tedious and it doesn’t seem to be inspiring either party to make a trade.

According to the latest information from HMR&C, the UK remained a net importer for the third month in a row in February following a 14 month period of being a net exporter. Season to date exports of wheat now total 1.26 million tonnes, while wheat imports have reached 1.13 million tonnes.

Looking back to the start of the trading season, a heavy volume of opening stocks allowed for the pace of wheat exports to continue at a similar rate seen thought last year. However, this pace started to slow in December and has remained under 100,000 tonnes per month since then as UK wheat has become increasingly competitive on a global scale.

If the current trend continues for the remainder of the season, we could either see the UK become a net importer this season, or alternatively, we could see UK wheat values reduce in value in order to effectively compete.

Judging by the amount of feed wheat currently available locally on farm, I would say that the former option would be the most likely.

We have seen further pressure added to the OSR over the last week or so as last week’s World Agricultural Supply and Demand Estimates (WASDE) from the US Department of Agriculture (USDA) have highlighted a swell in world production of soybeans.

The projected increase in global soybean output was largely driven by an increase to the crop sizes in South America, particularly for Brazil.

“Brazil witnessed the biggest upgrade to production levels this month with output up 3 million tonnes from the previous month’s estimate to a massive 111 million tonnes”. If realised, this year’s Brazilian soybean harvest would be 14% larger than the nation’s previous record harvest of 97.2 million tonnes in 2015. Total South American soybean production is now forecast at 346 million tonnes – this is 26 million tonnes higher than the previous record set in 2015.

Alongside the increases to production is a 0.7 million tonne increase to demand which with a back drop of the above figures is minimal. As a result, global ending stocks at the end of the current 2016/17 trading season on 31^st July are expected to hit 87 million tonnes – a 5 million tonne increase on last month’s figure.

Old crop OSR is currently valued in the region of £335.00/T ex-farm whilst new crop has firmly slipped below the £300.00/T ex-farm position.