New Crop Feed Wheat at £150/T

The London LIFFE wheat future for January 2014 closed at £164.50/T on Friday (29th November), just £0.25/T higher than the week previous. Wider markets were also unchanged on the week previous; presumably due to the absence of any American trade due to last week’s Thanksgiving celebrations.

Consequently, ex-farm values have remained unchanged after another week of very little movement on the trading screen.

Feed wheat for pre-Christmas collection is currently valued somewhere in the region of £160-163/T ex-farm although end-user requirement is very limited at this stage. For those of you looking for the £165/T ex-farm, movement could probably be negotiated for February/March time depending on farm location and quality.

Group 1 varieties are looking like they would make £180/T ex-farm for the New Year whilst Soft Group 3 varieties would make £168/T ex-farm. Group 2 varieties should make somewhere in between the two and buyer interest for all three is virtually non-existent. Why rush to extend cover in a market which hasn’t shifted in price for almost 8 weeks now?

It would appear however that this mantra isn’t currently applying to Chinese importers and recent purchases have been huge. have this morning confirmed that maize corn sales to China have been 182% higher throughout the Month of November than the year previous, presumably due to the comparatively low values and the uncertainty surrounding both the quality and quantity of their own maize corn harvests – something which won’t be reported on until this month’s WASDE from the USDA, due on the 10th December.

Closer to home, we have seen an increasing amount of interest in New Crop wheat from both buyers and sellers. Movement off the combine is currently trading somewhere in the region of £150/T ex-farm whilst November 2014 collection would make £155/T ex-farm. Hardly a bad place to start given the following…

The latest Crop Development Report from ADAS/HGCA (see the HGCA website for more at was released towards the end of last week and results are encouraging – for both the crops themselves and thus for a consideration of a harvest wheat sale of £150/T!

Despite the late start to this year’s harvest, good weather allowed rapid progress and fields were cleared in good time for cultivations and drilling. A prolonged period from mid-September through to mid-October coincided with peak cereal drilling time enabling the majority of crops to be drilled by the end of October.

“Mild weather and adequate rainfall has since encouraged rapid germination and strong early growth and the majority of winter cereals and winter OSR are in good condition going into the winter”.

·         WHEAT – As of the end of November, 94% of the intended 1.98 million hectares of winter wheat had been drilled. Memories of autumn 2012 had prompted an increase in early drilling this year which, given the mild weather appears to have paid off. Settled weather has got the crop off to an “excellent start” and the majority of fields look to be in a healthy state – “disease symptoms are just starting to appear in the more susceptible varieties but no action is required at this stage”.

·         BARLEY – The entire intended winter barley area (484,000 hectares – a 50% increase on last year) was drilled by the end of November. Drilling progressed “largely unhindered” with the majority of the crop in the ground by late October. Crops have established well and most are now tillering. Disease levels remained low during the autumn, “but mildew is now becoming common on susceptible varieties”.

·         OSR – The entire intended winter OSR area (740,000 hectares) was also drilled by the end of November with the majority of the crop in the ground by the end of September. Rainfall in early September provided moisture for “good establishment and mild conditions through until mid-November resulted in many OSR crops with large canopies and high ground cover”. Pest levels are low although slugs were active in some crops – rapid growth does however appeared to have minimised the damage caused.

Further afield, conditions across wider Europe are regarded as being “generally similar to the above”. 2014 Yields are still on track for being notably higher than this year’s harvest. Rainfall did slightly delay progress of both winter wheat and barley plantings across France and other parts of central Europe but crop establishment has since progressed well “thanks to above average temperatures and more than adequate soil moisture”. As for OSR, the majority of crops are now believed to be well established and are “more than ready to enter the winter period”.

Meanwhile, OSR values are slightly lower this morning as good demand struggles to compete with currency. For those of you in need of a pre-Christmas move, £290/T ex-farm appears a realistic value. For those of you who are a little more flexible regarding movement, £295/T ex-farm would probably be achievable into the New Year.

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