Friday 9th June 2017

Where do I start with this today’s Grain Report?

With this year’s harvest due to commence in as little as 6 weeks’ time, there is an awful lot of influential factors currently at play which will require some careful consideration over the coming weeks, particularly for those of you looking to make a start on marketing next season’s crop.

According to the EU Commission, total grain production for the European Union should still total the forecast 304.8 million tonnes next season despite the recent “less than ideal” weather. In France, Europe’s largest soft wheat exporter, we could see a 20% increase on last year’s output.

As for the UK, opinions are mixed regarding this year’s crop. Locally, the dry spring appears to have little impact on crops with good rooting systems, but we have seen some crop tillers thin out on lighter land, particularly where soft, lush crops coming out of a mild winter were hard hit.

Overall development is perhaps slightly behind although crops should catch up this week if the warmer forecast is realised. Although most growers are reluctant to comment on yield prospects, I would have said that optimism is high for most, particularly now that we are seeing the return of drier, warmer weather.

Further afield, a reduced output of winter wheat from the US is becoming increasingly likely. Around 50% of the crop is currently perceived to be in a “good to excellent” condition and with more than 80% of the winter wheat crop in the US now at ear emergence, condition ratings are beginning to have a significant influence on the Chicago wheat market. Regardless, ex-farm US values are continuing to be ‘cushioned’ by the carryover stock figures.

With the above in mind, trade opinion is split regarding the upcoming Northern Hemisphere harvest. For some, an average year would satisfy at easing the supply and demand situation given the carryover figures. Others are however convinced that the impact of the volatile weather experienced in the early spring is yet to be properly assessed and we could be faced with an “extremely plain” year ahead.

Regardless, last week’s election is of course taking centre stage at the moment, as are the consequential currency fluctuations. With Theresa May’s call for an early General Election backfiring with a Hung Parliament result, further political instability continues to rock the grain market boat regardless of any stabilising production figures.

Bring on the combines!