Week Beginning Monday 11th June 2018

New crop markets are nervous as dry weather concerns continue to be a common theme; Australia, the US, parts of Canada and the Black Sea are still grabbing the trades attention this week, hence the volatility.

At last week’s high, feed wheat for September collection was valued at £160.00/T ex-farm. This morning, £160.00/T ex-farm can be negotiated for November collection. £170.00/T ex-farm was offered for June/July collection next year and I was pleasantly surprised by the number of growers who agreed that this was a sell, at least for a small proportion anyway.

However, I was also surprised by the lack of nearby sellers for the September; front month wheat futures reached their highest level in almost four years last week. Back in the spring of 2014, the nearby wheat futures rallied into the £160’s/T on the back of significant weather concerns for both Russia and the US. By the following September, the nearby wheat futures had dropped to £112/T. Surely there are lessons to be learned from this?

For those of you with old crop left in the shed, £165.00/T ex-farm continues to be offered for spot collection. Buyer demand is good, but the old crop market appears reluctant to follow the level of volatility within the new crop market and ex-farm bids have hardly altered over the past week.

As for milling wheats, small opportunities continue to arise for pre-harvest collection for both full specification group 1 wheats and group 3 soft wheats – please speak with the office to discuss your requirements.

Over in Australia, the dry weather forecast earlier in the year has materialised, causing significant concern for winter crops. According to AHDB, only 41% of ‘normal rainfall’ (five year average) fell between April and June, both of which are crucial months for planting as the majority of the area is sown in May and June.

As well as delaying planting, the dry weather could also shorten the developmental stages of the crop, thus potentially impacting yield. However, forecasts for the coming weeks highlight that increased rainfall is coming, which could help crops which have already been planted. It will be interesting to see how the market will react to an apparent change in forecast over the coming weeks.

Meanwhile in the US, weather reports are mixed and their apparent impact on crop development is extremely confusing. Harvesting of winter wheat crops is now underway in certain areas whilst the planting of both spring wheat and maize corn is almost complete. Analysing the weather across such a vast area whilst considering the potential impact on both winter and spring drilled cereals is therefore rather difficult!

The recent rains in the Northern Plains appear to have had a positive impact on the spring wheat crop with 69% of the crop rated either “good/excellent”. This is 14% ahead of the rating given this time last year and in line with the five-year average of 68%. Planting also appears to be wrapping up now with 97% of planting completed.

However, winter wheat conditions apparently look less favourable with just 37% rated either “good/excellent”. This is 12% behind the ratings given this time last year ahead of harvest. With combines now rolling there will be little scope for recovery now. There are some early reports from the US on twitter but these are limited and I wouldn’t like to speculate at this stage as they are extremely varied.