This Week’s Grain Markets

Apologies for the lack of blogging activity lately… Here are a few items worth noting this week:

• The London LIFFE wheat future closed for May 2015 at £115.30/T ex-farm on Friday evening (17^th May) – £5.20/T lower than the week previous. In opening trade this morning the future is trading marginally higher at £115.50/T. According to agrimoney.com, the difference between old and new crop London wheat has continued to widen. On Friday evening the difference between the two stood at £10.40/T, marginally higher than the £9.75/T that separated the two by last week’s close and significantly wider than the £8.80/T difference at the beginning of the month.
• Old crop feed wheat values fluctuated anywhere between £122.00/T – £117.00/T ex-farm throughout the course of last week and current prices are valued at the lower end of this spectrum. Feed wheat for May collection is currently valued in the region of £116.00/T – £117.00/T ex-farm. Movement further forward into the early summer months is currently offering a £1.00/T per month carry – buyers appear relaxed regarding their old crop position at the minute and don’t appear to be in any rush to extend their cover or over commit to supplies at this stage.
• New Crop feed wheat values are generally unchanged this week. Small on-screen fluctuations don’t appear to be doing too much to the ex-farm value at this stage – £120.00/T ex-farm for as available collection off the combine still looks like a realistic value for harvest despite the fact that the November wheat future has slightly retreated to £125.50/T this morning.
• Old crop feed barley values have also fallen under significant pressure over the last week or so and current values are trading in the region of £106.00/T – £107.00/T ex-farm. New crop feed barley values are currently priced in the region of £110.00/T ex-farm for as available collection off the combine.
• Despite European wheat exports currently running at record levels, wheat carryover stocks heading into the 2015-2016 trading season (which commences on the 1^st July) are expected to be higher than they were a year ago.
• Rains across much of the central US wheat growing region have been welcomed this week by winter wheat growers following several weeks of notably dry weather. Further wet weather is forecast for the week ahead and feelings are mixed – whilst this may prove beneficial to winter crops, it looks as though it could push planting progress for next seasons maize corn crop further behind schedule. An estimated 10% of the total intended acreage is now in the ground – early days but this could be one to watch over the next couple of weeks. Timely planting is vital.
• The HGCA have this week reported that Russian commercial grain stocks as of 1^st April 2015 were just short of 23 million tonnes – a 17% increase on the year previous. The Russian agricultural ministry have also stated that ‘a decision on whether to alter, cancel or prolong the export duty on wheat won’t be made any earlier than mid-June’. Meanwhile, spring grain planting is now well underway in Russia and initial concerns that this year’s spring sowing campaign may ‘significantly suffer’ due to a lack of funding don’t appear to have been realised just yet. Around 2 million hectares worth of land is said to have been drilled with spring grains, slightly down from the 2.2 million hectares that had been drilled by this time last year. Again, this will be one to watch over the next couple of weeks.
• Old crop OSR values are volatile and prices have fluctuated anywhere between £250.00/T – £260.00/T ex-farm throughout the course of the last fortnight as the UK market continues to follow the trend of the French Market. Despite the fact that there are plentiful UK stocks available, old crop values are currently valued at a £20.00/T premium to new crop values which are stuck trading in the region of £240.00/T ex-farm. Looking ahead, this year’s Brazilian soybean harvest is almost complete whilst Argentina are rapidly approaching the 40% mark – we could be running out of time for any weather / logistical issues to develop.