Eggstreme Easter Weather Delays Spring Plantings

The last seven days have brought a rather welcome turn around to the grain markets as both old and new crop values edge higher, reinstating the benchmark  £200/T ex-farm for spot collection feed wheat.

As for new crop values, feed wheat for post-harvest / September collection would once again make £175/T ex-farm whilst November movement would offer £180+/T.

Trade volumes for both of the above have been strong, particularly for those who had feared they had missed the £200/T boat for the third time this marketing year.

The same cannot be said however for any farm-sellers holding on to old crop with any quality; the milling wheat trade has continued to be thinly traded with buyers looking for minimal coverage over the upcoming Bank Holiday Weekend. Milling premiums have continued to decline as full specification group 1 and some group 2 varieties struggle to make £20/t over feed wheat; hardly disastrous given the level of premiums we saw last season, but a fair dip from the £50/T on offer towards the end of 2012.

A slight improvement in feed wheat values has also encouraged feed barley prices; currently trading at a £12-15/T discount to feed wheat. Demand is also slightly better due to the prolonged winter weather – please enquire at the office for more information.

Spring appears to be slow to arrive here in the UK, but fortunately for wheat values it appears to be absent across much of the Northern Hemisphere. Snow cover is continuing to build across much of the central-western American plains, greatly delaying spring plantings (although this will in time bring great relief to drought stricken areas). Conditions in southern Russia are much the same and temperatures are incredibly low given the time of year; the amount of insulating snow cover to protect dormant winter crops is however very much open to debate.

Meanwhile, OSR values have slightly improved over the last week or so although volatility remains. Current values for spot collection are around the £380-5/T ex-farm mark but again prices are fluctuating all over the place. Continuing logistical issues in Brazil (which could potentially divert demand back to the US), a drier outlook in Argentina (who are just beginning to harvest soybean crops in more northern regions) and the persistently aggressive nature of Chinese demand are all having a strong influence on day to day price direction.

The grain markets are generally expected to be fairly quiet ahead of this weekend’s Easter break. Additionally, both the American domestic quarterly stocks report AND estimates for the American spring sowing intentions are due for release from the US Department of Agriculture (USDA) today (Thursday 28^th March). What percentage of the American soybean crop really is left on farm? What tonnage of wheat is still available in the old crop market? Will American spring sowings compensate for the potential drought damage?

There could be a fair amount of information to digest when we return on Tuesday; more on this next week.