Market Update

The FTSE 100 has plunged 8.5% this morning as its value is decreased by a staggering £130 billion, a freefall not seen since the 2008 financial crash. UK funds appear to be “preparing for the worst as it follows the global downward trend.

The price of oil had already fallen sharply this year as the disease to spread internationally, with demand for fuel expected to decline. Last week, the oil exporting group Opec agreed to cut production in order to support prices. However, the group also wanted non – Opec oil producers such as Russia, to agree to cuts. Over the weekend, Russia have rejected the plans.

In response, Saudi Arabia, an Opec member, has cut its official selling prices for oil and plans to increase production. BBC news have reported the move as “Saudi Arabia flexing its muscles in the oil market to make Russia fall into line”.

OSR values have retreated to £311.00/T ex-farm for spot collection this morning having peaked at £328.00/T ex-farm last week.

Feed wheat has retreated to £147.00/T ex-farm for April collection this morning, with feed barley at £123.00/T ex-farm. Further forward, there is very limited buyer interest as long-term commitments are hard to come by at the moment.

UK milling wheat premiums currently sit ahead of the three-year average and are at the highest point they have been since the 2014/15 season. The recent rise has been driven by an uncertainty regarding both the size and quality of the new crop. Regardless, with the feed wheat base falling, ex-farm values are still under pressure. £175.00/T ex-farm for spot collection seems a reasonable indication this morning.

Last week, the government announced plans to introduce E10 fuel, containing 10% ethanol as a new form of “cleaner” petrol, aimed at cutting carbon dioxide emissions. The new petrol has the potential to reduce co2 emissions by around 75,000 tonnes per year, the equivalent of 350,000 fewer cars on the road.

Petrol grades in the UK currently contain 5% bioethanol, known as E5. The E10 blend is already used in Germany, France and Belgium. Reports suggest that this “greener” fuel could become standard from next year.

Despite various online suggestions that this could provide a “huge boost” to the UK bio-ethanol production sector specifically, nothing has been confirmed and the UK wheat market is yet to react to the news… I think it is a little “preoccupied” at the moment…

The latest figures from the AHDB have confirmed that GB compound feed production so far this season is down from the previous season (2018/19). From July 19 through to January 20, the amount of compound animal feed produced, including by integrated poultry units, was 2% lower than the same months in 2018/19.

Specifically, cattle feed production is down 7.4%, potentially due to better forage availability this season. Sheep feed is down 16.5%. However, slightly compensating for this is pig feed, which is up 6.4%, and poultry feed, which is up 3%.

Moving forward, production figures usually fall in line with weather conditions – a favourable spring could keep demand under pressure.

We have managed to secure another load of Diablo spring barley seed which is now available for immediate delivery – please contact the office for more information.

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