Week Beginning 9th May 2016
Posted by Anderson Grain Marketing on May 9, 2016 in AGM News | 0 comments
Markets are quiet this morning as the trade eagerly awaits the release of this month’s edition of the World Agricultural Supply and Demand Estimates (WASDE), courtesy of the US Department of Agriculture (USDA).
Although the report will include updated figures for the current 2015-2016 trading season, it will also include the USDA’s first estimates for the Upcoming 2016-2017 trading season (which commences on the 1st July).
More on this next week.
The London LIFFE wheat future for May 2016 closed at £107.00/T on Friday evening (6th May), unchanged from the week previous. In opening trade this morning, the future is again unchanged.
With a four day trading week following the recent Bank Holiday weekend, buyer interest was slow and it was a rather quiet week on the old crop front.
Vivergo experienced some further ‘technical issues’ once again last week which meant that all deliveries for Thursday, Friday and Saturday were cancelled – these particular deliveries were re-arranged from the cancellations in the previous week and have been re-fixed for this week, third time lucky right!? We have received no news from our haulier this morning so I assume things are back up and running as normal.
Feed wheat for May/June collection is offered at £103.00/T – £105.00/T ex-farm this morning. Further forward, £110.00/T ex-farm is currently available for collection in the first week of August – this may be a good option for those of you who are flexible on storage / cash flow requirements, please contact the office for more information.
As for feed barley, £100.00/T – £101.00/T ex-farm is offered for collection this week. Export opportunities ex the Hull docks should keep values firm this week.
The London LIFFE wheat future for November 2016 closed at £117.50/T on Friday evening, -£0.70/T lower than the week previous. Again, a shortened trading week resulted in limited buyer interest.
Values in the short term are still under pressure; with such a large carryover forecast there is little need to over-buy wheat for delivery in August/September/October, even if it does look as though we could see a late start to this years harvest. However, we are beginning to see some movement in values for November onwards as uncertainty regarding this year’s European wheat crop remains. Generally speaking winter crops have emerged from winter dormancy in a good condition and a wet and warm April allowed for a good spring drilling campaign. However, these next few weeks will be crucial for crop assessment.
Speaking of crop assessment, a three day tour of Kansas’ Hard Red Winter Wheat (HRW) crop took place last week and as reported by the HGCA (please see their website for more), ‘findings look positive in terms of yield potential’.
Initial concerns regarding dry weather throughout Kansas, one of the key US wheat growing regions, were eased last week and the recent spring rains appear to have benefitted the crop. Yield expectations are as high as 3.3 tonnes per hectare in southern parts of the state – a significant step up from the 2.3 tonnes per hectare achieved last year and a five year average of 2.4 tonnes per hectare. Other tours of Nebraska and Colorado, also key wheat producing states, have also brought high expectations – Nebraskan yields are forecast at 3.6 tonnes per hectare (against 2.5 tonnes achieved last year) whilst yields for Colorado are estimated at 2.6 tonnes per hectare (slightly ahead of the 2.4 tonnes achieved last year).
Harvesting typically commences around the end of May/start of June in Kansas so although these results may seem comparably premature when we look at our crops here in the UK, they are actually a good indication of what this year’s US harvest should look like.