Markets Unchanged as Buyer Interest Thins

The London LIFFE wheat future for January 2014 expired towards the end of last week at little more than £150/T – a contract low. Consequently, old crop values are now priced in accordance with both the March and July values although ex-farm values have continued to be heavily disassociated with the screen over the last week. It would appear that the suits in the city have a rather different opinion to the physical end-users on where feed wheat values should be priced.


The March 14 value closed at £151.95/T on Friday evening (24th) whilst the July 14 value was at £154.70/T – both values are generally unchanged from the week previous.


Old crop values are trading around £0.50/T lower this morning in opening trade and local end-user bids are putting ex-farm values in the region of £152-153/T ex-farm for February collection. Movement further forward is continuing to offer little carry with April collection currently valued somewhere around the £155/T ex-farm mark. Again, buyer interest is particularly thin further forward at the minute – presumably due to declining ex-farm values and the amount of maize corn arriving into the country at the minute.

On the other hand, end-user demand for feed barley has continued to be firm and ex-farm values have therefore maintained their position in the early £130’s/T. Local feed compounders still appear to be using an increased amount of feed barley in their blends and buyer interest is good through to harvest – June / July collection should make £135/T+.


We have seen some fairly volatile activity on the new crop market this week as local ex-farm values become increasingly disassociated with the current on screen values. Buyer interest appears to be all over the place at the minute with various end-users undecided on their post-harvest position. Some local interest is equating to £143-5/T ex-farm for September collection whilst other bids struggle to make £140/T ex-farm. For those of you looking to make a start with next year’s crop, any buyer interest which equates to the mid £140’s/T would currently look good value.

Looking further forward, collection for spring 2015 is offering £150/T ex-farm.

Feed barley for harvest collection is currently valued somewhere in the late £120’s/T whilst movement towards November would make £130/T+.


The latest winter wheat figures from America would suggest that there is currently 3% less winter wheat currently in the ground for harvest 2014 than there was for harvest 2013 at 17 million hectares – this does however stand firmly above the 15M/Ha planted for the 2010 harvest. Price is believed to be the main reason behind the decline with soybeans, at the time of drilling, looking like the more profitable option.

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Regardless, plants are said to be in a very good condition due to an ‘incredibly mild’ winter and excellent soil moisture levels. Those bullish towards the market place do however appear to keeping a very close eye on the potential of a cold front – limited snow cover could become a serious problem if we see a sudden plummet in temperatures.

According to this morning (see the blog for more), the US weather outlook for the week ahead is bleak with low temperatures arriving in areas across the central plains with limited snow cover. They do however remind that the extent of the damage caused by the potential cold snap won’t become apparent until the crop comes out of winter dormancy, limiting price potential for the time being.


A similar situation appears to be evident in key wheat growing regions in Southern Russia – an unseasonably mild December has left winter wheat in a good but perhaps vulnerable condition. Winterkill could again become a serious problem if we see a sharp turn towards colder weather, particular due to the apparent lack of snow cover.


Meanwhile, OSR values have continued to fluctuate this week with current ex-farm values for spot collection trading around the £280/T mark as the pound continues to strengthen in the buyers favour. Plentiful Canadian and Australian supplies appear to be fulfilling Chinese demand at the minute although we are beginning to see signs of logistical problems which could potentially bring an increased demand specifically for European supplies.

The HGCA have also advised that domestic consumption of US soybeans is also firm in the US – 4.5M/T of soybeans were crushed back in December 2013, almost 0.2M/T higher than in November 2013 and the highest quantity crushed in a single month since records began in 2002. The high pace of crushing has however led to a ‘build up’ of soya oil stocks, resulting in a downward pressure on global oilseed values.


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