Ouch.

In last week’s column I commented that old crop feed wheat values had slumped to their lowest level in almost a year. Spot collection offered little more than £175/T ex-farm and end-user demand was thin as buyers remain well covered ahead of a potentially late harvest.

A week on from this and old crop feed wheat values have continued to decline even further. Spot collection feed wheat would currently struggle to make £167/T ex-farm – almost £50/T lower than where we were pre-Christmas (that’s £3,000 less per two lorry loads of feed wheat. Ouch).

New crop feed wheat values have also declined this week with current bids around £10/T lower on the week previous in the early £160’s/T ex-farm for September collection (this still looks expensive compared to French soft wheat values). Trade volumes are steady with buyers on the one hand reluctant to buy large quantities in a market place which is falling so quickly; whilst sellers on the other are just beginning to gain a little confidence in £160/T.

Winter wheat crops are certainly improving after a fortnight of warmer temperatures, blue skies and the odd shower. The HGCA crop trials at last week’s annual Cereals event had certainly benefitted from the above and whilst plots are perhaps not exactly ideal given the time of year, they have recovered remarkably well in the last couple of months.

Harvest 2013 is now officially underway in Southern Russia (around two weeks earlier than normal) and is expected to progress nicely over the weekend with a warm and breezy outlook forecast for the next few days. It is far too early to determine both yield and quality at this stage, but Russian analysts SovEcon have this week stood by their initial optimism for a significant recovery in production after last year’s drought problems.

Elsewhere, the US Department of Agriculture (USDA) have also stood by their own ‘initial optimism’ for a record America maize corn crop this year. Around 97M/A of the grain is expected to be in the ground for harvest 2013 and although some of these western acres will be late drilled, the USDA is showing no signs of concern at this stage – and I get the feeling that it could take another pretty serious weather event to persuade them otherwise.

As for American soybeans, planting is also delayed but is again not causing any serious concern just yet. Regardless, we could be looking at a rather late soybean harvest which could mean volatile new crop OSR values – those of you looking to sell forward for harvest collection should be aware of this. Current values for old crop are somewhere in the region of £375-380/T ex-farm for spot collection, whilst new crop OSR would make £330-335/T ex-farm depending on farm location for harvest collection.