Week Beginning 22nd June 2015

• The London LIFFE wheat future for July 2015 closed at £111.00/T on Friday evening (19^th June) – £5.50/T lower than the week previous. In opening trade this morning, the future is currently valued £0.50/T lower at £110.50/T. End-user demand for old crop feed wheat also appears to be waning and consequently physical ex-farm values have come under significant pressure over the last week or so. Bids in this morning for July collection currently equate to £115.00/T – £117.00/T ex-farm. For those of you willing to keep wheat into the early August months, small premiums are offered but with limited tonnages available – please contact the office for more information.
• The London LIFFE wheat future for November 2015 closed at £122.50/T on Friday evening (19^th June) – £2.00/T lower than the week previous. Volatility remained for new crop values throughout the course of last week and the futures appear to be moving in accordance with the strength of sterling. Further weather threats in America as harvesting of winter wheat begins have also contributed to the volatility.

  In opening trade this morning, the future has also opened £0.50/T lower at £122.00/T. This equates to £113.00/T – £114.00/T ex-farm for as available collection off the combine. For those of you looking for the £120.00/T ex-farm, Jan/February currently looks like a realistic movement period.

• Harvesting of Winter Wheat has begun over in the US and according to the HGCA, around 15% of the total hard red winter wheat area in Texas and Oklahoma had been harvested by the middle of last week.

  Based on a limited number of samples currently available, and again according to the HGCA, both average protein content (12.2%) and specific weight (76.9kg/hl) for hard red winter wheat are much lower than last year – if these figures are replicated throughout the harvest then this would be the lowest protein content since 2010 and the lowest specific weight for at least 13 years. ‘Substantial rainfall in the past month or so has promoted the development of yellow rust, which is thought to have contributed to the lower specific weights’.

  Quality data is not yet available for the soft red winter wheat crop – the recent wet weather has led to delays in harvesting which could introduce similar quality risks for the crop.

• As crisis talks continue in Athens, Sterling remains close to a seven year high against the Euro this morning. However, sterling also appears to be strengthening against the US dollar – over the last 18 months, a weak pound against the dollar has supported UK exports to non European markets. If the pound continues to strengthen against the dollar, we could see UK grain struggle to compete within a global export market.
• Dryness is also a concern for Spain at the minute following the warmest May on record. Local forecasts have suggested that this year’s grain crop could struggle to achieve 13 million tonnes – the five year average falls just short of 16 million tonnes. We should have a better idea of physical yields in the next couple of weeks.
• Over in Canada (the world’s fourth largest wheat exporter), ‘drier than usual conditions’ are increasing concerns for Canadian crop potential. Local crop reports have suggested that ‘soil moisture levels have continued to decline despite some recent scattered showers’ and significant rainfall will be required soon.
• Concerns are being raised for the French OSR crop according to agrimoney.com – dry weather and high temperatures are adding significant pressure. Yield potential could therefore be 10% – 15% lower than initially thought, particularly given that the flowering stage was 25% – 50% shorter than it would normally be. Winter wheat crops are also showing some small signs of stress but opinion is divided on the extent of the damage done. Regardless, 85% of the crop is still described as being in a ‘good’ condition. Harvesting of winter barley could be well underway by the weekend.
• UK OSR values are significantly improved this week despite the on-going currency pressures. £250.00/T – £253.00/T ex-farm is currently on offer for as available collection off the combine. Further forward, November/December collection should make £260.00/T ex-farm at this stage – this could be an option worth considering for those of you who are looking for payment by the end of the year.