Week Beginning 21st November 2016

The London LIFFE wheat future for November 2016 closed at £139.50/T on Friday evening (18th November), £2.00/T higher than the week previous.

Given that the nearby wheat future has made notable gains over the last seven days, ex-farm values are unchanged. Feed wheat for spot collection (pre-Christmas) is being offered at £138.00/T – £139.00/T ex-farm. Again, several growers are hoping to achieve the benchmark figure of £140.00/T ex-farm this week but with a lack of fresh news and a climbing pound, there is no logical reason to suggest that the markets should improve beyond their current position.

Milling premiums are still poor – full specification Group 1 wheat delivered Manchester is currently offered at a £7.00/T premium to feed wheat delivered into Yorkshire (it costs as an additional £6.00/T to haul it there). AHDB last week confirmed that the proportion of wheat samples which have met the high quality bread making specification is the highest seen for 13 years – it is therefore hardly surprising that milling premiums are struggling to improve despite the quality issues evident elsewhere in Europe.

Feed barley is currently offered at £120.00/T ex-farm for collection in the New Year – end user demand is good and there are a variety of delivery options for those of you with low bushel weights.


According to the HGCA, UK feed wheat prices have risen to their ‘narrowest disscount’ to any origin imported maize for nearly a year. The latest UK delivered feed wheat price into East Anglia is around £137.00/T – this is just a £10.00/T discount to any origin imported maize at £147.00/T.

They have advised that the relative price of imported maize to UK feed wheat is now “comparable to levels in much of 2014/2015 which may well impact usage decisions for both animal feed and bioethanol”. The early UK Balance sheet suggests that UK wheat usage in animal feed is to rise by 5% this season but, if maize continues to become more competitive, the usage level may come under pressure. It will be worth monitoring the changes to the UK balance sheet as we progress through the season.


From an agricultural perspective, China is an important trade partner to the US. Last season, 57% of all soybeans exported by the US went to China. According to the latest WASDE from the USDA, the US are forecast to produce an estimated 118 million tonnes of the soybeans this year, a 12 million tonne increase on last season. Exports are however forecast at 55 million tonnes which is just a 3 million tonne increase on last season.

As for China, soybean imports are forecast at a staggering 114 million tonnes this season, a staggering 31 million tonne increase on last season’s figure.

If Americasn production is on the increase alongside an increase in Chinese demand, it is crucial that the ‘mutually beneficial’ trade relationship between the two continues (I’m sure you can all sense were this is going).

During his election campaign, Trump labelled China a “currency manipulator” and accused them of being involved in “the theft of American Trade Secrets”. It will be interesting to see how the relationship between the two unfolds as he commences his Presidency.

If the relationship is strained, we could see an interest in South American supplies from the Chinese which, could easily be fulfilled as both Argentina and Brazil appear to be on track for excellent harvests this year. If realised, this would pressure US oilseed values lower and could have a potential knock on effect on the European oilseed market.


For any of you wanting further info regarding the US election result and the grain market, there is fantastic article on the AHDB website:


The US is the world’s largest producer of both maize and soybeans, as well as the 5th largest wheat grower. More importantly, it is a significant supplier of these commodities onto the world market. The initial market reaction to the instalment of a Republican government following 8 years of a Democratic President was as you would expect given the triumph of the underdog. However, this article discusses the long term impacts Trump’s Presidency could have on the global grain market – it is well worth a read if you have 5 minutes to spare.



Leave a Reply

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

This site uses Akismet to reduce spam. Learn how your comment data is processed.