Flu Jab

It is a sign of the time of year and perhaps my age that in recent days I have been invited for a Covid booster jab and a flu jab. As a trader both present an element of risk versus reward. A few potential hours of feeling somewhat groggy after the jab, versus the risk of a debilitating week of sickness, sweats, and aches at some point further into the autumn/winter period.

The autumn Yorkshire wheat trade has seen us continue to trade the Russian/Ukrainian conflict. As the market digests and trades each piece of news or twist and turn of events. Most recently last week the violent price moves as Russian first withdrew from the grain corridor deal which saw prices open £10/tonne up on the previous Fridays close pushing wheat close to £280/tonne ex farm December. Followed on Wednesday by their change of heart and the market rapidly losing approximately £12/tonne. On Sunday and Monday last week, a total of 12 ships were recorded by the UN to have departed from Ukrainian ports carrying 350,000 tonnes of primarily maize and wheat to a variety of destinations EU to North Africa, but also including 46k of OSR heading to the UK. More than 9.5 million tonnes have been shipped since the agreement in July. The corridor agreement is up for review on the 19^th November at which time Ukraine would like to increase the number of ports involved. In all probability a corridor will remain open as it is as much in Russia’s interest for grain to move to North Africa and Putin’s supporters as it is for Ukraine and the rest of the World.

Nearer to home ‘demand destruction’ brought about by high prices and wider national economic woes continues. Within the merchant/mill trade some September wheat was rolled forward to October movement, some October into November and now calls between mills and merchants are being placed to move some November contracts into the New year, as December is pretty much full already. This ‘destruction’ was highlighted in the latest figures from the AHDB for UK animal feed usage. The report stated, animal feed compound production fell by 5.8% year on year for the first quarter. Dairy blends were down 3.5%, Pig feed down 5.9%, Poultry down 9.8%. Add to this the reduced industrial usage and lack of intake at Vivergo and Ensus and it is easy to see why spot wheat is difficult to trade and move from farm.

Reduced prices have finally seen some UK feed wheat become export competitive. Business has taken place from south coast ports. Trade is slow and the prices offered equate to sub £260/tonne ex farm in southern counties.

Perhaps though the biggest threat to the price of Yorkshire feed wheat may yet come from ‘Bird Flu.’  The combined Poultry sector feed production accounts for 45% of the total amount of animal feed that is produced in Great Britain. According to the latest Government updates ninety-eight cases have been confirmed since the 1^st October 2022. The slaughter of birds on the infected units primarily in Norfolk and East Anglia taken place but cases are slowly moving north.

As a cereal grower with harvest 2022 wheat in the barn unsold and harvest 2023 crop nicely established in the field, sales of wheat at current levels ex farm in Yorkshire may represent your very own flu jab. You might temporarily feel glum, that the price of wheat did not hit £300/tonne as you hoped, but in weeks to come it may be substantially better than a bird flu affected price to export out of the Humber, as we struggle to move the sixteen million tonne wheat harvest, we have just had.