Crops in Need of a Drink as Dry Weather Continues

Summer may be on the way but there is little sign of it here in North Yorkshire. Mild temperatures, chilly winds and very little rainfall have stalled crop development over the last few weeks and although it may be a little early to be concerned, I’m sure many would be grateful for the arrival of some wetter weather.

Poor ground moisture levels are also becoming an issue in other parts of Europe. The warmer conditions experienced earlier in the season across Spain, France and Germany may have driven crops into an earlier awakening from winter dormancy, but it has also left them in a delicate condition and susceptible to stress. A lack of rainfall and below average temperatures could therefore have a significant impact on both spring and winter crops and will be worth closely monitoring as things start to ripen.

Further afield, potentially damaging snow fell over key wheat growing areas in the US last week, providing a boost to global grain values. More than 12 inches of snow was said to have fallen across several Midwest wheat producing areas and although it soon cleared, the Chicago wheat market rallied by almost 5%. However, it will take several weeks to accurately assess the extent of the damage done as crops continue to develop and trade opinions are mixed; for now I would simply make use of these market gains.

New crop feed wheat for collection off the combine at harvest is currently valued in the region of £135.00/T ex-farm. Further forward, movement before the end of the year can be negotiated at £140.00/T ex-farm for most growers.

The value of the pound against other major currencies has maintained its improved position over this last month, although day to day volatility is expected to continue ahead of next month’s general election. The realisation of an expected landslide victory by the Conservatives should, in theory, strengthen the pound and consequentially add pressure to the wheat market.

The above appears to have boosted trade volumes over the last few weeks, alongside the reminder that we were buying wheat for harvest at £112.00/T ex-farm at this time last year; current values may not be quite at the top end of your target range but they are a big improvement on the previous season and are certainly a good place to start.



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