Week Beginning Monday 10th June 2019

THIS MORNING’S LONDON LIFFE WHEAT FUTURES:

  • JULY 2019 – £150.00/T – £5.40/T lower than the week previous
  • NOV 2019 – £150.00/T – £6.60/T lower than the week previous
  • MAY 2020 – £158.70/T – £4.10/T lower than the week previous
  • NOV 2020 – £155.20/T – £3.30/T lower than the week previous

 

POUND Vs EURO

MONDAY 10TH JUNE – 1.1221

MONDAY 3RD JUNE – 1.1304

MONDAY 20TH MAY – 1.1418

MONDAY 13TH MAY – 1.1584

TUESDAY 7TH MAY – 1.1696

MONDAY 29th APRIL – 1.1584

TUESDAY 23RD APRIL – 1.1558

 

Between the 13th May and 3rd June (in three weeks), the November 19 London LIFFE wheat future gained more than £17.00/T with both Chicago and Paris new crop futures also enjoying a sharp rally.

However, over the past week, the rally appears to have stalled and the London new crop wheat futures have since retreated. This can be attributed to ‘technical trading’ to a certain extent as when markets rise rapidly, there is always an element of profit taking involved. However, these lower prices were sustained towards the end of last week, suggesting a cooling off period alongside the realisation that prospects for this year’s northern hemisphere harvest are still good, despite the ongoing weather difficulties in the US.

 

The harvest position has now retreated back into the early £140.00’s/T for harvest collection with November collection trading somewhere in the region of £146.00/T ex-farm. £150.00/T ex-farm is still on the table for next spring and we remain convinced that a new crop sale of £150.00/T ex-farm for next season remains good value.

As for old crop, demand is waring thin and the limited buyers are trying to push old crop values below £150.00/T ex-farm for July collection. Feed barley values remain buoyant with some good local interest – please speak with the office to discuss your requirements.

 

Here in the UK, ADAS have rated a staggering 83% of this year’s wheat crop in a good to excellent condition and indicated production forecasts are in the region of 15 million tonnes. Disease pressure remains low and moisture levels are mostly good following a further week of patchy rainfall.

 

Throughout Europe, prospects are good. Germany is now on track for a 25 million tonne wheat harvest, a rebound of 21.9% from last year’s disappointing harvest. Rainfall throughout France has also boosted prospects for this year’s soft wheat crop over the past couple of weeks.

 

As of last week (Monday 3rd June), US corn planting progress had reached 67% complete according to the USDA. With initial trade expectations forecasting this figure somewhere between 67% and 75%, we thought this would persuade the market upwards. However, with a better forecast given for the week ahead alongside the realisation that corn would be planted up to the 25th June, the market weakened.

The 5th June marked the last date for corn drilling for full insurance, but corn can be drilled beyond this, up to the 25th June, with a reduction of 1% per day. With the ongoing trade tensions between the US and China amongst a back-drop of poor Chinese demand anyway, there is a huge incentive to try and get maize corn in the ground. With this in mind, it will be interesting to see what figure the USDA release this evening.

Also, whilst the trade has remained distracted by US corn plantings, developing wheat crops there are quietly progressing nicely. As of the 2nd June, the USDA have increased the proportion of wheat in a good to excellent condition to 64%.

 

The latest GB cereal usage figures courtesy of AHDB were released last week (with information as far forward as April), please see the link below to view the report in full:

https://cereals.ahdb.org.uk/media/1494072/GB_AFproductionstats_Apr19.pdf

Although the animal feed production figures are much lower than last year, AHDB have reminded that the mild and dry spring experienced this year in comparison to spring 2018 will have made a big difference in the feed usage.

As for the milling industry, the amount of wheat used in April 2019 compared to April 2018 is 20% lower at 446,000/T. This is probably due to the closure of the bio-ethanol plant in Hull and Middlesbrough.


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