SPRING DRILLING COMMENCES

Spring has apparently sprung here in East Yorkshire and some growers are now well into their spring drilling campaign as much as 65 days earlier than last year; the difficult conditions over the past couple of years have encouraged some to seize the recent window of opportunity and make a start. For others, soil temperatures are simply not warm enough yet and with a mixed forecast ahead, they have chosen to hold off and have prioritised fertiliser applications instead.

Looking ahead, prospects for this year’s northern Hemisphere harvest are improving every day. Here in the UK, the recent sunshine and timely tillage applications have certainly given winter cereals a boost and the majority look extremely well. On the continent, the land is dry but again, crop forecasts are excellent.

Further afield, both Russia and Ukraine have enjoyed a reasonably mild winter. Over in the US, their spring drilling intentions include a significant area of both spring wheat and maize corn at the expense of soybeans. Initial estimates suggested that due to a 4% decline year on year in the winter wheat acreage, we could be looking at a smaller wheat crop this year. However, a slight increase to the spring wheat acreage alongside a thriving crop has encouraged estimates in excess of last year’s performance.

Back home, the seemingly more positive Brexit news has encouraged the value of sterling higher, further pressuring the UK market specifically. If European wheat exports, namely French, are narrowly able to compete for trade into the worlds largest import of wheat, Egypt, when up against a well-priced Black Sea alternative, then UK wheat exports simply do not stand a chance.

With the above in mind, it is hardly surprising that the new crop grain market has fallen away over the past month, dragging a reluctant old crop market with it.

Feed wheat for spot collection is now valued in the region of £165.00/T ex-farm, with £170.00/T ex-farm hardly on the table for late summer collection. The recent announcement that Ensus, the bio-ethanol plant in Teeside will re-commence production later this month has had a minimal impact on the old crop market as there are plentiful stocks of imported maize corn in the North to sustain it. However, end-user demand elsewhere continues to be very “hand to mouth” in the short term and there is certainly business to be done to fulfil the April-June position.

As for new crop feed wheat, £150.00/T ex-farm remains negotiable for this time next year which in my opinion is remarkable given the sheer potential in the ground for Harvest 2019. Rumours of an “impending drought” are circulating but there is no evidence to support this.

Putting the current trading season aside, the last time UK feed wheat traded at £165.00/T ex-farm was almost five years ago, in the May of 2014.

Selling wheat forward for the 2018 harvest in the previous autumn may have turned out to be incorrect, but poignantly, repeating the same strategy for this coming harvest could prove to be extremely correct! Consistency is key; current levels remain excellent value and should not be dismissed lightly.

Emma Croft

Anderson Grain Marketing: 01759 302003


Leave a Reply

Your email address will not be published. Required fields are marked *