European Grain Market Update

The UK feed wheat market has continued to firm this week and although the screen is volatile, buyers who are looking to make short-term cover before Christmas are keeping values buoyant.


Feed wheat for spot collection continues to be valued in the region of £140.00/T ex-farm despite the recent strengthening of the pound against both the Euro and the US Dollar. Further forward, movement is limited as buyers remain reluctant to over commit themselves long term amidst market uncertainty.


May collection is only offering a couple of pound per tonne premium to the spot position.

As for feed barley, £120.00/T ex-farm is currently being offered for spot / January collection. Again, the premium for movement into the early summer months is poor.


According to the latest data published by the EU commission (please see the AHDB website for more on this), cumulative EU wheat exports so far this season are 9% ahead of the same stage in the season last year which is surprising given the initial forecasts.


Full season wheat exports for the current 2016/17 trading season were forecast at 25 million tonnes by the EU commission, a 24% decrease on last season’s total. This is because of a cut in production due to adverse weather conditions earlier this year in key producing countries such as France and Germany.


As of the 22nd November, season to date EU wheat exports totalled 9.4 million tonnes – this is 38% of the initial full season forecast. Compare this to the same point last season, the EU had exported just 26% of its estimated full season wheat shipments.


It will be interesting to see if this rapid pace continues as we head into the New Year as Trump begins his Presidency – will his complex relationship with China affect global trade?


Looking ahead to next harvest, planting and establishment conditions were apparently ‘less than ideal for both winter grain and rapeseed crops across parts of the EU’s main producing countries’ according to the HGCA.


“Drier than usual conditions through September and into October impacted planting and establishment across north-western Europe, including France, Germany and the UK. The heavy rainfall which followed then led to planting delays in parts of central and Eastern Europe”.


The above is believed to have affected winter rapeseed crops more than anything else – in France, the delays were fairly extensive and the quality of the crops is variable. In Germany (the EU’s largest rape producer) development is extremely uneven and plants are believed to be at risk of frost damage.


With a less than ideal start, there will be a greater need to monitor how weather conditions unfold across Europe in the coming months to support crop potential.


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