OSR back to £300/T

The London LIFFE wheat future for November 2013 closed at £156.75/T on Friday (23^rd August) – £4.15/T higher than the week previous but still £6.10/T lower than the beginning of the month (according to the HGCA).

This is currently the equivalent to £150/T ex-farm for spot collection feed wheat – for those of you who are not in desperate need of immediate movement, September collection would probably make a couple of pounds per tonne more this morning. Christmas movement is currently falling just short of £155/T ex-farm.  

Trade volumes slightly thinned towards the end of last week despite the moderate increase in ex-farm values as farm-sellers rushed to get crops in the shed before the arrival of Friday evenings rainfall and many ‘city-based’ traders made the most of the Bank Holiday weekend (as one of them ‘politely’ reminded me last week “not all of us have a combine to drive on Monday”).

As for anything of any quality, milling premiums are rather scarce at the minute. There are the ‘odd jobs’ for the ‘odd variety’ available, but these are generally to fulfil existing contacts as opposed to any fresh buyer interest. For now, end-users appear well stocked up with foreign wheats and are ticking over with a few new crop UK wheats – they will probably start pinpointing premiums once they have a better idea of overall crop quality in a few weeks’ time (and judging by the samples we have seen so far, I wouldn’t count on a £45/T for your 75kg/hl JB Diego again). Trade rumours would however suggest some quality issues with regard to protein content in some Russian wheats – this could prove helpful post-harvest.

The feed barley trade has also turned quiet now that the majority of the immediate moves off farm are complete. Current values are maintaining their £20/T discount to feed wheat for spot collection.

As for malting barley, the first of the spring varieties have been delivered this week with no major problems to report of. Those of you which contracted Concerto / Belgravia on our ‘average LIFFE plus premium’ contract  will be pleased to know that full specification samples are currently making around £200/T ex-farm for the former, £195/T ex-farm for the latter. A similar deal is now available for Harvest 2014 – please contact the office for more information.

For those of you with un-contracted spring varieties, tonnages for spot collection are currently very limited and will probably continue to be so until the maltsters fulfil outstanding contracts and (as with the milling trade) gain a clearer idea of overall crop quality.

Overall harvest progress here in GB has been ‘very good’ over the past seven days according to ADAS as beneficial August weather compensates for the slow maturation of crops. 25% of the total combinable crop area is now in the shed – this is a big increase on progress this time last week but still lags behind the five year average of 50% complete by the third week in August. Around 15% of winter wheat is now said to be harvested with yields ‘currently’ (treat the term with caution) close to average at 7.6-7.8T/Ha.

Underpinning the moderately improved grain markets this week is news of a poor American weather forecast for the next fortnight. The persistent dry weather in recent weeks hasn’t been too much of an issue to maize corn as temperatures have been relatively cool (low temperatures tends to compensate for a lack of rainfall). However, much higher temperatures have been forecast for the next 14 days – good for maturation but in areas where ‘rainfall has been lacking, this could be detrimental to yield potential’. American weather will therefore be playing a big part in grain values over the next couple of weeks – and I can’t help but feel that a drop of rainfall would soon send our equivalent London wheat values back to where they started at the beginning of the month.

The dry and warm American forecast has also encouraged soybean – and thus our equivalent OSR values over the last couple of days. OSR for September collection reached £295/T ex-farm on Friday afternoon, whilst November/December movement would have made £300/T ex-farm.

According to ADAS (see agrimoney.com), average UK winter OSR yields have lifted to somewhere between 3.3-3.5T/Ha now that almost half of this year’s harvest is in the shed (and judging by what we have personally seen on farm this doesn’t exactly seem overly optimistic). Total UK production could therefore be nearer to the 2M/T mark than we had initially thought.