Week Beginning 29th May 2017
Posted by Anderson Grain Marketing on May 30, 2017 in AGM News | 0 comments
Old crop feed wheat values have fallen significantly over this last week or so. Feed wheat for spot collection is currently valued in the region of £143.00/T – £145.00/T ex-farm whilst movement further towards harvest should still secure the benchmark £150.00/T ex-farm. As for feed barley, buyer interest remains thin with both larger end-users and local stockmen – £120.00/T ex-farm would be a realistic offer for spot collection.
New crop feed wheat values are largely unchanged this week following the extended Bank Holiday Weekend with as available harvest collection at £135.00/T ex-farm. Further forward, October collection should secure £138.00/T whilst £140.00/T can still be secured for movement towards the end of the year.
According to the latest EU crop monitoring report from the EU commission, the average forecast yield for EU barley next season has fallen to 4.76 tonnes per hectare. This is firmly below initial expectations and is 1.5% lower than the five year average. This is said to have been largely driven by adverse growing conditions in Spain, France and Germany where cold spring weather and a rainfall deficit have caused problems over the last couple of months, particularly for spring drilled crops.
In Spain, barley yields are expected to be 30% down on last year at 2.54 tonnes per hectare. In France, barley yields are expected to be 10% down on the year.
It will be interesting to see what happens to the crop ratings for wheat as we head closer to harvest.
OSR values have also retreated this week – old crop OSR is currently valued in the region of £320.00/T – £325.00/T ex-farm whilst new crop values have slipped firmly below the benchmark £300.00/T ex-farm (with £290.00/T being bid in some cases).
A slightly weaker pound, widely reported weather concerns and a lack of physical old crop supply should in theory be boosting the market but buyers remain unconcerned and ex-farm values are unresponsive.
On top of already excessive soil moisture levels, further wet weather is set to arrive in Canada, the world’s largest canola exporter, later on this week. According to AHDB, particularly heavy rainfall is expected in Alberta (which accounts for around 30% of production) and Saskatchewan (which accounts for around 55% of production) this week where less than a quarter of next season’s canola crop has been planted.
They added that “farmers in Alberta need to complete planting by the 5th of June in order to qualify for crop insurance. If it gets too late, we may see farmers switch their canola area to barley as it requires a shorter growing season”.
The latest production forecast from the USDA for Canadian Canola is expected to be a record at 21 million tonnes. However, the USDA have simultaneously forecast the opening stocks for next season at a 20 year low, leaving minimal room for error. This will certainly be one to watch over the next month or so, particularly if you are a harvest seller of OSR.
Furthermore, it is important to note the current value of the Brazilian Real as we have seen it devalue by almost 7% against the value of the US dollar. As a result, South American soybean exports appear much cheaper alongside a US alternative to importers and the value of US soybeans has therefore had to adjust accordingly. In turn, this also adds pressure to European values – they must also devalue in order to effectively compete within the global market place.