Week Beginning Monday 15th April 2019

THIS MORNING’S LONDON LIFFE WHEAT FUTURES:

• MAY 2019 – £162.50/T (£3.25/t higher on the week)
• NOVEMBER 2019 – £148.25/T (£2.25/t higher on the week)
• MAY 2020 – £153.40/T (£0.40/t higher on the week)
• NOV 2020 – £149.50/T (£3.95/t higher on the week)

POUND Vs EURO

THIS MORNING – 1.1573

MONDAY 8^TH APRIL – 1.1622

MONDAY 1^ST APRIL – 1.1623

MONDAY 25^TH MARCH – 1.1637

MONDAY 19^TH MARCH – 1.1676

MONDAY 11^TH MARCH – 1.1530

Old crop farm selling remains slow and end-user demand continues to wane; competitively priced maize corn imports are continuing to undermine domestic grain usage and recent estimates suggest that almost 2 million tonnes worth of maize corn has arrived into the country since harvest last year. Furthermore, the newly approved Brexit extension will allow for further imports without tariffs for a little longer yet.

The dry weather has continued throughout Europe for another week although there is some heavy rainfall planned for Northern Europe (including the UK) next week. Significant rainfall deficits are now being reports for Spain, Portugal and Morocco which may offer some short-term price support for the UK as challenges for the Spanish and Portuguese crops has historically resulted in increased exports to the region… Brexit depending of course.

A down-pour throughout Spain was received over the weekend but both surface and subsurface soil moisture remain below 2018 levels. More will be required here and on the rest of the continent to ease concerns.

Despite the increases on the LIFFE screen this morning, the physical ex-farm market is pretty much unchanged.

Feed wheat for spot collection is valued at £163.00/T ex-farm this morning, with £165.00/T ex-farm offered for June. Milling premiums appear to be increasing, with full specification group 3 soft wheats commanding an £8.00/T premium whilst full specification group 1 varieties are achieving a £25.00/T premium.

Whilst the latest WASDE report from the USDA showed only minimal changes this month, there are a few key points to be aware of:

• US wheat ending stocks were revised up to over 29.5 million tonnes due to a slow export pace this season. If realised, this will be the third highest on record. The downward revisions to US wheat exports have supported EU exports, which have been raised by 1 million tonnes to 24 million tonnes. This increased export forecast leaves EU wheat ending stocks at minimum levels and the lowest since 2013.

Regardless, with a recovery in the area planted throughout the EU alongside favourable crop conditions, the above may only provide minimal, short-term price support for the EU. Old crop supplies need to remain competitive in order to effectively compete within the export market.

• US maize corn ending stocks are also at their third highest level on record at 51.7 million tonnes.
• Canadian rapeseed exports have been revised 1 million tonnes lower due to the break down in relationship between China and Canada. As a result, Canadian ending stocks are forecast at an all time high of 3.4 million tonnes.
• Global ending stocks of OSR are forecast at the highest in five years.

Please see here to view the report in full:

https://www.usda.gov/oce/commodity/wasde/wasde0419.pdf

Please see here to see the comment from AHDB:

https://cereals.ahdb.org.uk/markets/market-news/2019/april/10/grain-market-daily-100419.aspx

As much as 30 inches of snow could potentially arrive over key US maize corn growing states early this week. So far this year, planting has yet to begin in Illinois due to earlier flooding delaying field work. Other states are also unable to make a start. However, whilst this may be frustrating, any concerns may be slightly premature at this stage. Last year, maize corn plantings by the end of April were hardly 30%, but by the end of May, more than 75% was drilled. We would therefore need to see significant delays before we see any market reaction. Furthermore, AHDB have reminded that “the recent wet weather has left soil moisture levels high, which could in fact provide a favourable outlook for the new crop once planted”.

Elsewhere, dry weather over in Russia is having the opposite affect and is providing an extended window for spring wheat drilling. As a result, the estimated spring wheat area this year is now forecast at 12.2 million hectares, a 1.7% increase on last season. The total wheat area is now forecast at a ten-year high and given the currently favourable conditions, wheat production for next season is now forecast at 78.6 million tonnes – a 9% increase on this season.