Week Beginning 23rd April
Posted by Anderson Grain Marketing on May 24, 2016 in AGM News | 0 comments
The London LIFFE wheat future for November 2016 closed at £117.20/T on Friday evening (20th May), unchanged from the week previous. Small currency led movements throughout the week didn’t appear to affect ex-farm values, particularly those in the short term. In opening trade this morning the future is valued £1.20/T lower at £116.00/T.
Feed wheat for September collection is currently valued in the region of £108.00/T – £110.00/T ex-farm.
As for old crop values, the London LIFFE wheat future for May 2016 expired towards the end of last week, leaving the July 2016 wheat future as the only remaining old crop future on the trade screen. In opening trade this morning, the future is valued at £107.85/T, unchanged from Friday evening’s close.
Feed wheat for June collection is values at £105.00/T ex-farm this morning.
As confirmed by the HGCA last week, European company CropEnergies AG, who own the Ensus bioethanol plant in Teeside, have announced that the plant will reopen this summer (July at the very latest) after a prolonged period of closure. The test-run reopening of the plant coincides with a recent sharp increase in EU ethanol prices, as well as the closure of a rival plant in Rotterdam last week. However, it is not clear how long the trial period will last, as this will depend on ‘prevailing market conditions’.
But what could this mean for North East feed wheat prices?
As advised by the HGCA, ‘feed wheat prices in the North East (including Yorkshire) have been at an average discount of £3.81/T to nearby UK wheat futures this season. Last season, wheat prices ex the farm in this region were at an average premium of £2.06/T.
There are many factors that will affect the value of North East grain prices next year – weather, subsequent yield performance and local export opportunities will all play their part but the restart of the Ensus plant ‘would greatly support local usage and could therefore also support a higher regional price relative to futures’. This will be an interesting one to watch.
According to the latest ‘ UK Prospects’ report from ADAS (released 19th May), cumulative rainfall since January has been above average and rainfall throughout April averaged 53mm – typically we would expect somewhere in the region of 24mm. 24mm fell in April 2015.
Day temperatures throughout April were normal although night temperatures were much lower than what we would typically expect – frosts were a more regular occurrence than they have been all winter. As a result, soil temperatures did not begin to warm until early May.
By the end of April, winter wheat crop development was in line with recent years with the majority of crops having the second node detectable (GS32). More forward crops were beginning to progress through stem elongation. Delays to spring pesticide applications have affected weed, pest and disease control in some crops and we could see threats to yield potential due to high black grass levels alongside high Septoria and Yello Rust pressures.
As for winter barley, crops typically had two to three nodes detectable, with the most forward crops starting flag leaf emergence. A small minority of backwards winter wheat and winter barley crops, predominantly those that were either late drilled or those that are further north were at the late stages of tillering.
The report also commented that by the end of April, spring barley drilling was 92% complete, spring wheat drilling was 98% complete and spring oats were 95% complete. Wet conditions meant that only occasional spring cereal crops on lighter land were able to be planted by mid March; further drilling progress was then made on light and medium soils in early April, whilst the majority of crops on heavier soils were drilled in the latter half of April.
The latest drilled crops were slow to emerge and were not helped by cool overnight temperatures and in some cases, poor seedbeds. However, despite this initial slow emergence, overall crop development of spring barley is similar to recent years. By the end of April, early sown spring barley crops on lighter land were at early tillering (GS21), with occasional very early crops at stem elongation. Other later drilled crops on heavier land typically had two to three true leaves.
To view the above report in full, please see the link given below (the report looks at various regional disease pressures in more detail which some of you may find interesting):