Week Beginning Monday 16th July 2018

Despite the downward movement of new crop prices last week, current UK values are now higher than the Paris wheat future, despite the latter representing a high-quality milling grade. AHDB have added that “with UK carryover wheat stocks estimated at their lowest for five years and questions surrounding the potential of this year’s wheat harvest, UK supplies look set to be tight once again this season. As a result, UK prices have therefore risen to limit pre-season exports and potentially stimulate imports”. It will be important to monitor the size of the gap between the UK values and other equivalent global prices as there is likely to be a limit as to just how wide the gap can get.

Although volatile, the market has experienced a slight change in sentiment over the past few working days. Although question marks remain regarding both the quality and quantity of crops throughout the Northern Hemisphere, early European figures are perhaps faring slightly better than expected. Furthermore, last week’s WASDE report from the USDA may have been bearish on the wheat side, but the numbers were certainly more optimistic on the corn side.

WHEAT

• Global wheat production for the current 2018/19 trading season is now forecast at 736.26 million tonnes. This is an 8.43 million tonne reduction on last month’s estimate.
• US production however is surprisingly increased slightly to 51.21 million tonnes (49.74 million tonnes last month).
• Unsurprisingly, Russian production is lowered by a further 1.5 million tonnes to 67 million tonnes. The current forecast now stands a massive 18 million tonnes behind last season’s bumper crop.
• European wheat production is now forecast at 145 million tonnes, a 4.5 million tonne reduction on last month’s estimate due to “persistent dryness, particularly in the North”. This is 6 million tonnes behind last seasons crop.
• Interestingly, the estimate for the developing Australian wheat crop has been lowered by 2 million tonnes on last month’s figure to 22 million tonnes.
• With global supplies declining more than projected use, world ending stocks are reduced 5.3 million tonnes to 260.9 million tonnes.

MAIZE CORN

• Global maize corn production for the current 2018/19 trading season is forecast 2 million tonnes higher this month at 1,054.30 million tonnes.
• US production is forecast 5 million tonnes higher than last month’s figure at 361.46 million tonnes.
• Russian corn production is lowered, reflecting “reductions to both area and yield due to extreme heat and dryness”.

OILSEEDS

• Global oilseed production is down 1.4 million tonnes from last months estimate to 592.6 million tonnes.
• OSR production is reduced by 2.6 million tonnes with lower production forecast for the EU, Australia, Ukraine and Russia. In the EU, “rapeseed production is lowered for Germany and the UK on persistent dryness while production is lowered for France on pest pressures”.

Early winter barley samples in this morning are very good; excellent considering both local expectation and the recent weather extremities! Bushel weights are good with all samples meeting specification – 65kg/hl seems a fair average at the moment.

As for winter malting barleys, Craft is proving to be an excellent replacement for SY Venture moving forward. Bushel weights are good and screening contents have been on the low side so far. Yield estimates are anywhere from 7.5 tonnes – 9 tonnes per hectare.

Movement this week is currently being negotiated at £140.00/T ex-farm; please speak with the office to discuss your requirements.

Feed wheat for November collection is this morning valued at £170.00/T ex-farm.