Week Beginning 3rd April 2017
Posted by Anderson Grain Marketing on Apr 6, 2017 in AGM News | 0 comments
The London LIFFE wheat future for November 2017 is valued at £138.00/T this morning following another quiet week. Feed wheat for as available collection off the combine at harvest is currently offered at £130.00/T – £132.00/T ex-farm. Looking ahead, November collection is valued in the region of £135.00/T – £138.00/T ex-farm.
Seller interest in the new crop market appears to have stalled this week and whilst many are simply pre-occupied with land work, the HGCA have this week warned sellers to not become complacent with current values.
UK values have risen this season due to a tighter domestic supply situation alongside a weaker pound which has positioned the UK wheat market at a premium over other global markets. BUT – it is important to remember that this is a very unique position.
Looking ahead, the UK’s relationship to global prices next season will depend on both the size and quality of the UK crop and various other external factors. Unless we see a tight domestic situation again next season (which is statistically unlikely), UK prices will have no be more competitively priced in order to compete globally – we are already seeing the new crop wheat futures align more closely with other global markets when compared to the old crop market.
Moral of the story? Don’t become complacent with the current values!
Although volatile, the value of the pound against the euro has strengthened by almost 3% over the last few working days – it is therefore surprising that the value of UK wheat has maintained its position this week.
For those of you with old crop wheat left in the shed, spot collection has continued to trade at £150.00/T ex-farm. Looking ahead, £160.00/T is offered to those of you who are prepared to store old crop wheat into late July / early August – please contact the office for more information on this.
Meanwhile, spring drilling is now well underway with many farmers now nearing completion. Conditions have been ideal for most with mild seed beds, warmer days and plentiful showers. As for winter crops, yield prospects at this stage in the season are extremely promising and we have heard of very few weed, pest or disease issues to report of. For those of you looking for extra seed, there are certain varieties of both barley and wheat available for immediate delivery – again, please contact the office to discuss your requirements.
The latest planting survey from the US Department of Agriculture was released towards the end of last week and the results caught the market by surprise. According to the report, US farmers intend to expand the area planted to soybeans for the upcoming 2017 harvest by a staggering 2.4 million hectares – a 7% increase on the previous year and an amount which is far larger than trade expectations. As a result, the Chicago soybean futures are currently valued around $7 lower than Friday’s position. The UK market is however unchanged on both old and new crop positions which is surprising but beneficial to sellers – old crop is currently valued in the region of £335.00/T ex-farm whilst new crop is floating around the £300.00/T ex-farm mark.
Plantings of US wheat also look set to fall by an estimated 8% from the previous year to an estimated 18.6 million hectares. If realised, this would be the lowest wheat ever planted in the US (based on records going back to 1919).