OSR heads for £250/T

It has been another volatile fortnight for the grain markets with current feed values for spot collection trading anywhere between £118.00/T – £123.00/T ex-farm. Current values appear to be somewhere in the middle of the two at around £120.00/T for November/December collection although I dare say this could be different again by the time this goes to press.

Further forward, buyers into the New Year appear to have fallen quiet again following the recent rally. Feed wheat for January is currently offering a £1-2/T premium on the pre-Christmas position.

For those of you looking towards next harvest, £130.00/T ex-farm for as available collection in August 2015 was briefly available last week and values are currently trading at a couple of pounds per tonne less. This could be one to watch for those of you looking to make a start on marketing next year’s crop.

Currency fluctuations have continued to underpin the wheat market over the last seven days, hence the ongoing volatility. In addition, Russia appears to have returned to the world wheat market, as confirmed with Egypt’s purchase of Russian wheat for November delivery last week. The Russian Rouble has fallen by 13% against the Euro since the beginning of July, making them competitively priced against alternative European supplies.

Consequently, UK wheat priced in sterling will now have to compete on price against both European and Black Sea supplies – and this is before we have the Southern Hemisphere harvests arrive into the Market Place.

Speaking of which, harvesting of winter wheat is now well underway in Australia and although the trade is yet to receive any ‘official’ confirmation of yields there we should be looking at a crop somewhere in the region of 24.0M/T – not exactly a record breaker but certainly above average.

Over in South America, maize corn harvesting in both Argentina and Brazil is still 12 weeks away yet. Both are again on track for above average years and the likelihood of a weather event in the meantime is becoming increasingly slim. I would imagine that this will play a large part in market direction over the next couple of months, particularly as there is unlikely to be any ‘logistical issues’ this season – the global grain trade won’t exactly be desperate for supplies come February given the success of this year’s Northern Hemisphere harvests.

Finally, OSR values are slightly improved this week and for those of you who are looking for movement into the New Year, values are currently trading in the region of the benchmark £250/T ex-farm. For those of you looking to secure some pre-Christmas payment, £245/T ex-farm currently looks like a more realistic value.