OSR Retreats to a 3-year Low

25^th July 2013 – and still no sign of any combines here in East Yorkshire. The UK grain market over the last seven days has been littered with rumours regarding ‘record bushel weights’, ‘excellent yields’ and ‘overall good quality’ for the South of England but we are yet to hear of any ‘official’ reports.

Combines are currently believed to be as far North as Cambridgeshire at the minute although we are hearing reports of the odd fields of winter barley being cut in South/West Yorkshire in areas that have avoided this week’s thunderstorms. A brighter outlook for the weekend should allow progress to continue. Hopefully.

There isn’t anything particularly exciting to report for the rest of Europe either at the minute. Harvesting is continuing at a steady pace across Southern France, Western Germany and the majority of Spain. Yields are once again said to be ‘encouraging’ but there is yet to be a release of anything more official than that.

Consequently, wheat values are once again unchanged this week with November 2013 collection currently valued somewhere around the £165/T ex-farm mark, whilst late spring collection for May/June 2014 would make £170/T ex-farm. Those of you looking for movement off the combine would probably struggle to make £160/T ex-farm at the minute. Feed barley is currently at a £20/T discount to feed wheat.

Meanwhile OSR values have continued to decline this week as new crop prices slip to a three year low. September collection is currently offering somewhere between £293-298/T ex-farm whilst movement into the New Year would offer around £4-5/T more.

There are a number of influences which are currently weighing pretty heavily on ex-farm values; the Chinese are now importing Australian Canola (something which they haven’t done for years), the Argentinians are continuing to export masses of cheaply priced soybeans as quick as physically possible and Chinese demand appears to have levelled. Furthermore, Europe is expecting a crop of more than 21M/T this year – all of which has to compete with the above in terms of price.

Trade volumes are currently minimal with farm-sellers opting to contract tonnages into store instead. For those of you who can afford to do something similar, movement into store rather than directly into a crush might not be such a bad option.

By October/November time South American soy supplies and Australian canola exports will be limited, leaving Europe, the Black sea and North America responsible for the maintenance of exports; we may not see the mighty £400/T again but this could surely be an argument for price potential? If only I knew.