Week Beginning Monday 22nd February 2016

The London LIFFE wheat future for March 2016 closed at £104.25/T on Friday evening (19th February), £0.50/T lower than the week previous. In opening trade this morning, the future is unchanged. As for the May 2016 wheat future, this was valued £1.15/T higher in opening trade this morning at £107.00/T.

Feed wheat for March collection is currently valued at £105.00/T ex-farm. April collection should offer a £1.00/T premium but values beyond this are mainly unchanged – buyers appear reluctant to over commit in a falling market.


Feed barley is this morning valued at £95.00/T ex-farm. Export interest is good and is allowing for rapid movement off the farm – please contact the office for more information.


As for new crop values, the London LIFFE wheat future for November 2016 is this morning valued at £119.00/T ex-farm. This is the equivalent of around £110.00/T – £112.00/T ex-farm for as available collection at harvest. November collection is offered at £115.00/T ex-farm.


There is little fresh news available at the minute – the media is constantly searching for any weather concerns, political issues or potential crop reductions which could potentially alter the market. Other than the odd comment of a lack of snow cover in Russia or a slightly wetter-than-normal forecast for Central America, there isn’t much of anything new to report.

Focus therefore remains on the sheer volume of this season’s crop – where the demand is, how exports are progressing, alterations to forecast ending stock figures which will ultimately be carried over into next season.


France AgriMer have further increased their estimate for surplus French soft wheat supplies (the amount left unallocated after both domestic demand and exports are accounted for) to 6 million tonnes. They further advised that the increase is “in light of a reduction in exports to countries outside the EU”.

This “reduction in exports” can probably be attributed to a reduction of shipments to Egypt due to what the HGCA have described as a “confusion over trading terms” and the consequential rejection of a large shipment due to ergot levels.


Total French wheat exports are now forecast at 18.8 million tonnes for the current 2015-2016 trading season. If realised, this will be 6% lower than that for last season (2014-2015).

The HGCA added that “if French exports don’t begin to gather pace or the surplus wheat is not allocated for domestic uses, stock levels and the end of the current trading season will be considerably higher than the five year average of 2.6 million tonnes”.


Speaking of Egypt, another shipment of wheat was rejected last week for again containing traces of ergot. The latest rejection was a shipment of Canadian wheat and was refused just days after the reassurance that Egypt would accept cargoes containing up to 0.05% of ergot which is in line with international standards.

Suppliers are therefore wary of selling to Egypt and many offers have typically included an ‘added risk premium’ which has slowed down the pace of trade. The issue is making the markets nervous, particularly since Egypt is the world’s largest wheat importer.


However, it is important to recognise that Egypt has only purchased 415,000/T of wheat for delivery between Jan-March 2016. In Jan-March 2015, 1.6 million tonnes worth of wheat was purchased for delivery in this time frame. Egypt will therefore need to source further wheat to make up for this significantly slower pace – could this ultimately improve European values?


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.