Week Beginning 25th April 2016

The London LIFFE wheat future for May 2016 closed at £105.55/T on Friday evening (22^nd April) after falling £2.00/T that afternoon. Regardless, this is £1.35/T higher than the future’s close the previous week. Old crop futures were extremely volatile last week – feed wheat for spot collection has valued anywhere between £102.00/T – £107.00/T ex-farm over the last seven days.

Short term buyer interest remains limited this morning although we are assured that Vivergo is back up and running this week, apparently. Once the back log is dealt with and the first of the May Bank Holiday’s is out of the way, I imagine buyer interest may begin to pick up slightly.

In opening trade this morning the future is valued £0.55/T lower this morning at £105.00/T. This is the equivalent of £103.00/T ex-farm for May collection feed wheat, £105.00/T ex-farm for June collection.

Feed barley is valued at £100.00/T ex-farm this morning – export opportunities ex Immingham dock are keeping values firm this morning.

As for new crop values, the London LIFFE wheat future for November 2016 closed at £117.55/T on Friday evening (22^nd April) following another volatile week. The future briefly touched upon £122.25/T mid week, the equivalent of £115.00/T ex-farm for September, before rapidly declining towards the end of the week.

Many sellers had pinpointed September wheat at £115.00/T ex-farm as their starting point for marketing next year’s crop and although some took instant advantage of this whilst it was available, there were many who did not. £115.00/T ex-farm was offered on Thursday morning and by lunchtime the markets had dipped by £3.00/T ex-farm; those that wanted some time to keep an eye on the market for the afternoon simply ended up missing out.

The moral of the story? The importance of identifying a target figure and sticking to it!

In opening trade this morning, the future is valued a further £0.80/T lower at £116.75/T. This puts September wheat at £110.00/T ex-farm, with November collection at £114.00/T ex-farm.

The dry, warmer weather was well received last week and although a few growers are still struggling to get spring crops planted, I think it’s fair to say that good progress was made.

Wheat crops across most of Europe are developing well and although there are some concerns regarding crop quality in Poland, the overall outlook currently looks extremely favourable (a small amount of Polish winter wheat will need to be replanted with spring wheat – the majority of which has had a delay to establishment).

According to agrimoney.com, the French have planted an ‘80-year high record crop’ and conditions there are extremely good – 92% of the wheat is described in an either ‘good or very condition’ as of last week.

Estimates for this year’s soft wheat crop are anywhere between 39 – 42 million tonnes and it seems reasonable at this stage to expect a crop similar to last year’s bumper harvest.

The OSR market also suffered a volatile week for both old and new crop values. Old crop OSR was offered at £280.00/T ex-farm mid-week for May collection; this morning, values are priced somewhere in the region of £268.00/T – £277.00/T ex-farm. Currency appears to be predominantly responsible for the volatility although various trade rumours regarding the South American soybean harvests (mainly the Argentinean crop) also played their part.

As for new crop values, £260.00/T ex-farm for August collection currently looks like a realistic offer – £270.00/T ex-farm was offered at the early part of last week.