Feed wheat hits £165/T

The London LIFFE wheat future for November 2013 closed at £166.60/T on Friday (19th October) – £3.60/T higher than the week previous. However by close of trade on Thursday (18th), markets were unchanged on the week previous – the £3.60/T was added entirely throughout the course of trading on the Friday. According to the HGCA, this is the ‘highest daily gain’ for London wheat futures since the middle of August (when the market was persuaded by rumours of a potential American drought). It has also the highest close for the November 2013 wheat future since very early July.

But what has managed to persuade the market upwards this time around?


According to the Argentinian government (in announcement made late on Thursday evening UK time), this season’s wheat crop (which is due to be harvested any time now) could total just 8.8M/T – an even smaller crop than last year’s disappointment. This is said to be attributed to plant sowings back in the spring being ‘the lowest for decades’ and a run of detrimental weather over the last four-six weeks. The September supply and demand estimates from the USDA (the latest because we never received an October edition) predicted the crop to be somewhere in the region of 12/T – more than 3M/T higher than what the Argentinian government have now forecast.

The majority of the trade, according to agrimoney.com is now waiting to see if the government will give any indication that wheat exports will be halted – ‘temporarily or otherwise’.


Neighbouring Brazil also appears to be struggling with ‘detrimental weather’ – heavy rainfall may be benefiting both maize corn and soybeans but is putting those trying to harvest winter wheat under serious pressure. Southern Brazil is expected to receive a serious amount of rainfall this week which could prove detrimental to both yields and quality.


In opening trade this morning the November wheat future opened £1.40/T higher but is currently slightly lower – an indication of a market with a serious lack of direction.

Opening bids in this morning are varied and equate to somewhere in the region of £164-165/T ex-farm for October/November collection. Movement further forward into January/February would probably make £167/T ex-farm but buyers are limited given the current volatility of the market.

As for feed barley, export trade ex-Hull has given the market a little life over the last week or so although values have struggled to gain in line with feed wheat – November movement is offering somewhere in the region of £133-135/T ex-farm depending on farm location.

As for any malting varieties, end-user demand has continued to be limited. There are the odd jobs available for movement into the New Year which are offering very reasonable premiums – tonnages are however limited. For those of you looking to make a sale, this should be seen as a selling opportunity.


Meanwhile, the latest import/export data for the UK from HMR&C are in for August – the second month of the 2013-14 trading season. The UK imported 255,000/T of wheat in August, 67,000/T higher than in August 2012. It is however a big step down from wheat imports in the previous month with 73,000/T less arriving in the country than in July.

The cumulative wheat import figure then for the season so far stands at 584,000/T – a fairly large quantity compared to the 358,000/T in the same period in the 2012-13 season.

This is the highest volume of wheat to be imported in the first two months of a season ever recorded.


According to the HGCA, these figures represent a strong start to the season for wheat imports. This is however probably attributed to the late and rather unsure start of harvest; these imported quantities should decline now that the improvement of grain quality has been confirmed.

Wheat exports on the other hand were reported at just 2,300/T. Total wheat exports for the season so far stand at just 34,000/T – disappointing compare to the 65,000/T exported in the same period in the 2012-13 season.


Meanwhile, oilseed markets have again moved higher this week with £300/T+ ex-farm currently available for spot collection OSR. This increase is attributed to the demand side of the coin rather than supply – the US soybean harvest is progressing well despite some initial delays, Canadian canola looks set to exceed initial expectations and wet weather in Brazil is beneficial to soybean establishment BUT Chinese demand has been excellent over the last fortnight as their own farmers appear reluctant to sell. There could be a little life in this market just yet.

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