Feed Wheat Retreats to 12 Month Low

Its official – UK feed wheat for November collection has hit a one year low as ex-farm values struggle to make £155/T. September movement would probably offer somewhere in the early £150’s/T ex-farm.

Trade volumes have once again been rather thin over the last seven days as end-users appear reluctant to make any large-scaled commitments whilst farm-sellers appear keen to “get the stuff cut first” before they make any further obligations.

We are just beginning to see wheat samples arrive in at the office, the majority of which have tested well. Crops on heavier land look as though they are still a couple of weeks away yet, although if this heat-wave arrives as promised over the weekend there could be more wheat cut in August than we had initially anticipated.

Feed barley is currently around a £20/T discount to feed wheat and trade volumes have been relatively high over the past week – boats in at both New Holland and Hull docks are allowing for almost immediate movement off farm at the minute.

Winter malting demand is still poor with premiums between £5-10/T ex-farm (and that’s if the maltsters are looking to buy any additional coverage in the first place). As for spring varieties, malting demand is much better. However a record 922,000/Ha of spring barley has been planted by UK farmers this year (according to AHDB); so depending on overall quality, this level of demand could soon change.

We have only seen a couple of spring barley samples so far (Concerto), both of which have been more than acceptable for malting.

Spring barley contracts for Harvest 2014 are now available for Concerto, Overture and Odyssey. The contracts are similar to those of last year and are priced on an average wheat base with a quality premium added as applicable – those that contracted their 2013 crop are looking at an ex-farm value of around £200/T for as-available collection. Please contact the office for more information.

The latest Supply and Demand Estimates from the US Department of Agriculture (USDA) were released at the beginning of this week and having gone through the figures, it is hardly surprising that London feed wheat has ‘struggled’ over the last few days.

The forecast now estimates this season’s global wheat crop at a record 705M/T – 7.5M/T higher than their initial estimates just four weeks ago. This includes a European wheat crop of 141M/T – 9M/T higher than last year’s output.

Increases were also made to this season’s wheat output in the Black Sea due to good yield reports from Kazakhstan, Southern Russia and the Ukraine (the Ukrainian wheat harvest alone is expected to produce 2.5M/T more than they ‘rather optimistically’ anticipated in the first place).

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