Markets Volatile as Uncertainty Continues

It has been yet another busy week for the UK feed wheat market with both old and new crop supplies being heavily traded.

Although values have edged marginally lower over the last couple of days, feed wheat for as available collection traded at £155/T ex-farm earlier this week; a value which appeared to be a tempting place to start marketing next year’s crop for many growers in our area.

Further forward, November/December collection touched on £160/T ex-farm but again values are currently slightly lower.

Exports of both wheat and maize corn have continued out of the Ukraine “unhindered” for another week despite the on-going political unrest there. Newly annexed by Russia, the Crimean region is a small player in agricultural production and the current situation should therefore have little impact on committed exports, reassuring importers that their orders will at least be fulfilled for now.

However, with regard to new crop commitments we are just beginning to see signs of buyers seeking alternative supplies, even if it means paying more.

Importers appear to be focusing on Canadian, European and US grains as an alternative to Black Sea wheat and although values are at a premium, buyers can at least be reassured with guaranteed deliveries.

Elsewhere, talks of dry weather in Australia have subsided this week after a weekend of heavy rainfall along the East Coast. “Severe dryness ahead of the sowing period for winter grains” was raised as a problem towards the end of last week but the recent rainfall is believed to have been “largely beneficial”.

Further rainfall is also forecast for most of New South Wales this week which should (if realised) “greatly improve prospects for their winter sowing campaign”.

Elsewhere, the same cannot be said for south-west areas of the US which have suffered yet another week of mild but dry weather. Concerns are particularly prominent in southern areas of the central plains where virtually no rainfall is forecast for the next fortnight. Again, this could be one to watch for those of you with wheat left to market for the harvest period; a continuation of dry weather could add some serious pressure to new crop values.

Finally, old crop values are generally unchanged this week with feed wheat for spot collection trading in the region of £170-174/T ex-farm depending on the flexibility of movement. For those of you able to carry supplies into the summer months, £180/T ex-farm could well be negotiated at this stage – a value we haven’t seen since last July.