Week Beginning Monday 18th January 2016

The London LIFFE wheat future for January 2016 closed at £109.60/T on Friday evening, £1.40/T lower than the week previous. In opening trade this morning, the future is valued £0.25/T lower.

Feed wheat for February collection is this morning offered at £106.00/T – £107.00/T ex-farm. For those of you looking for £110.00/T ex-farm, May collection currently looks like a realistic offer.

Feed barley is still struggling to break the £100.00/T ex-farm mark – February collection is currently offered in the region of £96.00/T ex-farm.

As for new crop values, the London LIFFE wheat future for November 2016 is this morning valued at £122.75/T. Feed wheat for pre-Christmas collection is therefore valued at £120.00/T ex-farm. Further forward, April 2017 offers £125.00/T ex-farm.

This month’s World Agricultural Supply and Demand Estimates (WASDE), courtesy of the US Department of Agriculture (USDA) were released on Tuesday evening last week (12^th January). High on the trade’s agenda was any notable changes to the South American crops, any changes to European / Russian / Argentinean export figures and any changes to global ending stocks. Fortunately, the report managed to clarify the majority of the above questions. Unfortunately however, the report has brought few changes to the London wheat market and current values for both old and new crop wheat are continuing to trade sideways.

A few key points taken from the report are highlighted below – to view the report in full, please see here:

http://www.usda.gov/oce/commodity/wasde/latest.pdf

WHEAT

• Global wheat production for the current 2015-2016 trading season is now forecast at 735.39 million tonnes. This is a 0.46 million tonne increase on last month’s figure and continues to be a record high.
• Slight increases are made to both Russian and European wheat production this season.
• Argentinean production is unchanged (10.5 million tonnes), Brazilian production is reduced by 0.4 million tonnes on last month’s figure to 5.60 million tonnes. Australian production is unchanged at 26 million tonnes.
• Global use is reduced, mostly in the United States.
• With supplies increasing and use reduced, ending stocks are raised by a further 2.2 million tonnes on last month’s figure to a record 232 million tonnes. This total is 9% larger than the previous stocks record set last year.

  MAIZE CORN

• Global maize corn production for the current trading season is forecast at 967.93 million tonnes. This is 5.94 million tonnes lower than last month’s estimate.
• Production is lowered 4 million tonnes for South Africa – continued heat and dryness throughout December has further reduced prospects for area and yields. “Satellite imagery in western producing areas suggests that much of this year’s crop may not have even been planted”.
• US corn production is forecast slightly lower at 345.49 million tonnes – harvested area is slightly higher but yields are forecast lower. Regardless, the crop remains the third largest crop on record.
• There are no changes made to South American maize corn production and only slight increases are given to Brazil’s export figure.
• World maize corn ending stocks remain at a record high at 208.9 million tonnes – half of which are held by China.

  OILSEEDS

• Global oilseed production for the current trading season is now forecast at 526.9 million tonnes. This is a 2 million tonne decrease on last month’s estimate. Global soybean production is projected at 319 million tonnes.
• US oilseed production is estimated at 116.2 million tonnes – a 1.5 million reduction on last month’s figure but still a record crop.
• There are no changes made to the major South American soybean crops – Argentina is on track for a 57 million tonne crop, Brazil a 100 million tonne crop. Exports for Brazil are unchanged at 57 million tonnes, Argentina’s exports are forecast slightly higher at 11.8 million tonnes.