Grain Rally Halts as Wheat Slumps £10/T

As we head into the last full trading week of the year, the grain markets appear to have settled from the recent volatility.

Ex-farm values for spot collection feed wheat rose and fell buy a little more than £10/T throughout the course of last week and whilst many farm sellers took the opportunity to secure some movement at £140/T ex-farm, others were caught out by the £8 drop which occurred over the course of two days.

The threat of a potential grain export ban in Russia had initially encouraged grain values upwards; despite the excellent harvest this year and the weakening of their local currency (the rouble) against the dollar, export volumes throughout the first few months of the trading season have been low.

By mid-week however, the Russian government insisted that there was ‘to be no impending imposition of any export ban’ and that they merely intended to ‘monitor the situation over the coming months’. Consequently, UK wheat values retreated as quickly as they had advanced.

However, minor weather concerns for next year’s Russian wheat crop remain and appear to have limited the decline of new crop values. A dry summer and autumn has already added pressure to next year’s winter wheat crops which are said to be ‘poorly established’, particularly in the Southern district where more than 60% of Russia’s wheat is produced.

As with any winter wheat crop the extent of the damage done during establishment is difficult to quantify at this stage of the season. Regardless, there is a general consensus that the South will require a mild winter this season; something which currently looks unlikely. Low temperatures have already set in along the south coast and snow cover is currently providing inadequate crop protection further north.

A similar situation is emerging over in the US and market opinion is split regarding next year’s winter wheat crop; a large area has been successfully drilled but an early arrival of cold temperatures and wet weather may prove detrimental to the crop long term.

For those of you looking to make a start on marketing next year’s crop, the above will definitely be one to watch as we head into the New Year.

Current feed wheat values for as available collection at harvest are trading in the region of £135/T ex-farm. Buyers were offering up to £140/T ex-farm early last week although this quickly followed the downward trend that old crop values succumbed to. For those of you tempted by £140/T ex-farm, this may be negotiable for November/December 2015 collection; please contact the office to discuss your movement requirements.