Feed Wheat Sinks to £110/T

Apologies for the lack of Blog activity lately… Harvest 2014 appears to be taking up a good chunk of our time at the minute!

Local feed wheat values have come under further pressure this week with current prices for spot collection now trading in the region of £110/T ex-farm.

Values for movement further forward are also much poorer this week with collection pre-Christmas now struggling to make much of a carry over the spot value. Many farm-sellers appear to be holding off this week to await the outcome of today’s Scottish referendum; we could potentially see wheat values become increasingly volatile if Scotland decide to leave the UK.

Milling wheat premiums have however continued to increase as uncertainty over this year’s German Milling wheat crop continues. For those of you with full specification group 1 varieties in the shed, you should be looking at £45/T+ premium above feed wheat for movement in the next few weeks. Sales of German milling wheat to France have however occurred this week which could suggest that quality there might not be quite as bad as officially believed – we are yet to see any post-harvest commitments from the UK.

For the French crop, just 59% of the intended milling wheat crop is said to be good enough for bread making, sharply lower than the 95% seen last year.

Switching the subject back to feed grains, this month’s World Agricultural Supply and Demand Estimates (WASDE) from the US Department of Agriculture (USDA) were released towards the end of last week and are predominantly responsible for the added pressure to local ex-farm grain values this week.

Global wheat production for the current 2014-15 season is now forecast at a record 720.0M/T following good harvests across much of the Northern Hemisphere. Additionally, the forecast for this year’s maize corn crop was also raised, again after a good start to this year’s harvests across much of North America and Europe. Total production is now forecast at a staggering 988.0M/T – another production record.

The US is expected to contribute almost 366.0M/T (around 37%) to the above total, hence the current market focus on harvest progress there. 75% of the crop is said to be in a ‘good to excellent’ condition according to the USDA although as little as 10% is believed to be in the shed. ‘Average to good’ yields are rumoured although the trade still awaits more ‘official’ confirmation of this.

For oilseeds, this month’s WASDE pushed global production ‘even further into record territory and although demand projections have also been increased, it is not sufficient enough to prevent a large stock build up’ (according to the HGCA).

Consequently, local ex-farm values have edged back towards the £235/T position. Movement is however rapid with plentiful demand into the crush throughout September and October.