Week Beginning 11th May 2015

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Posted by Anderson Grain Marketing on May 11, 2015 in AGM News | 0 comments

The London LIFFE wheat future for May 2015 closed at £107.95/T on Friday evening (8^th May) – £3.90/T lower than the week previous. As it was announced that the Conservatives had won the 2015 general election with an overall majority on Friday Morning (8^th May), the pound simultaneously strengthened against the Euro by a significant 2%. This has since added further pressure to an already declining wheat market. The pound is currently valued at 1.39 against the Euro.

For comparison, Paris milling wheat for May is currently valued at EUR156.00/T – the equivalent of around £112.00/T after falling EUR22.00/T throughout the course of the last week.

For those of you with feed wheat left to sell, £110.00/T ex-farm currently looks like a realistic offer for May collection. June/July collection should make £2.00/T – £3.00/T more although buyers are continuing to be limited given the current decline of the old crop wheat market. Some small opportunities remain for collection into early August and for those of you that are flexible on collection this could prove beneficial as good premiums are offered – please contact the office for more information.

As for new crop values, the London LIFFE wheat future for November 2015 closed at £119.05/T on Friday evening – £1.20/T lower than the week previous. In opening trade this Morning the future is valued unchanged. Evidently the gap between old and new crop wheat remains above £10.00/T according to the London LIFFE trade screen which is unusual given the fact that we are now into the second week of May. Physical trade is however largely dissociated from this as values for new crop feed wheat for collection off the combine at harvest are currently trading in the region of £110.00/T ex-farm – the equivalent of moving old crop feed wheat off the farm today. For those of you looking to commit feed wheat for collection beyond this, £115.00/T ex-farm is offered for November/December collection.

US crops are said to be making ‘variable progress’ according to the HGCA this week as they emphasise the ‘importance of watching some of the most influential growing areas in the Northern Hemisphere’. The next few weeks are described as being ‘crucial’ because both the sowing and establishment of spring crops is currently taking place alongside ear emergence of winter wheat crops. Consequently, soil moisture and weather conditions are becoming increasingly important for harvest prospects – both establishment and ear emergence are key development stages with regard to determination of yield. For winter wheat, the overall area for harvest 2015 is the lowest for five years; hence the increased reliance on growing conditions to support final production levels. As for spring wheat, sowings are 1% higher than last year and have progressed rapidly over the last few weeks in several of the key growing areas which have experienced dry weather – notably Dakota, Minnesota and Montana. As of 3^rd May, 75% of all US spring wheat sowings had been completed – significantly ahead of the 40% that we would normally expect at this stage in the season.

As for US maize corn planting, reports are mixed. Again according to the HGCA, much of the Midwest and southern states endured a slow start to the drilling season due to very wet conditions. However, drilling across the two main producing states, Iowa and Illinois and now around 70% complete.