All Hail the Ale

The pubs are open.  Harvest 2022 malting barley contract is now available.

The restaurants open. Livestock at the market continues to trade at high levels.

The public are eating and drinking like every night is Saturday night, and the shops are open as well for those who are so inclined.

Cereal farmers in Yorkshire are all drilled up winter and now spring crops. Fertiliser and agrochem is being applied, in the hope that an inch of warm rain followed by some warm nights and sunny days helps maximise the yield potential.  So, it is game on for harvest 2021 and planning for harvest 2022 begins.

This last month, old crop wheat has traded down to £190 ex farm on the back of continuing supplies of imported grain and lack of enthusiasm on the part of the mill buyers who seemed relaxed about the amount of April/June wheat they still need to buy.  Prices have rallied back towards £200 per tonne ex farm for June on rumour of potential drought in North America and Canadian Spring Wheat drilling areas and a possible tightening of world supply.  The perception of dryness at drilling can be a worry, but also means more acres of American/Canadian wheat and maize have been drilled to date than normal.  If, and when, the rain does come, the crop will undoubtedly be in a better position than thought currently possible and the current bullish sentiment in the market may prove to be short term.  Elsewhere, favourable Russian weather has led to an increase in the crop estimates for Russian and Ukrainian wheat supply for harvest 2021.  Recent days have seen new crop wheat trading at £160 or fractionally over, whilst November trade peaked this week at £170 ex farm.  Harvest as-available barley has been trading at £140 per tonne ex farm and oilseed rape at £390 for harvest and £400 for November.  Theoretically then all seems well with the world!

But as always it pays not to be complacent.  The old crop market may yet come under pressure as mill buying demand falls away. National merchants need to empty grain stored from harvest and April/June pool grain must be traded and moved.  A strong sterling/euro rate relative to early season values will see imported old crop grain continue to arrive at UK ports and New crop French milling wheat is available today for July, delivered UK at the equivalent of £194 per tonne.

Currently we have imported to the end of February 1.668 million tonnes of wheat and 1.980 million tonnes of maize, all adding to the UK harvest stock.  Latest AHDB figures quote 2020 wheat harvest at 9.61 million, 2021 wheat harvest forecast at 14.572 million, against a 5-year average of 13.674 million tonnes.

A stronger sterling will also put harvest barley prices under pressure as the UK crop struggles to compete on the World stage for export business.  July 2020-February 2021 we have exported 1.074 million tonnes of 2020 crop barley.

Therefore, with old crop wheat at £200 per tonne ex farm for the third time this year and new crop grain at levels that over the previous 10 years would be considered selling money.  Placing the balance of any old crop into the market and a little bit of what you fancy wheat, barley or OSR new crop at these levels could be a very prudent thing to do.

Thinking of which, it is Saturday, the pubs are open, and I fancy a pint, Theakston’s, I think. Cheers!!