Week Beginning Monday 23rd April 2018

• The London LIFFE wheat future for May 2018 is higher this morning from Friday’s close at £143.00/T. This is £3.50/T lower than the opening trade a week previous.
• The London LIFFE wheat future for November 2018 is higher from Friday’s position at £146.75/T. This is £0.30/T higher than last week’s opening trade.

• The London LIFFE wheat future for November 2019 is also higher this morning at £146.95/T. This is £0.55/T lower than the week previous.

Last week was an extremely volatile week for the old crop London wheat market. The local physical trade had become extremely disassociated from the London LIFFE wheat future screen in recent weeks and the gap between the old and new crop futures had narrowed.

According to the AHDB, the delivered premium over futures into Yorkshire in April is now the highest in recent years. Feed wheat delivered into North Humberside and Yorkshire was reported at £160.00/T, a £13.35/T premium over the London LIFFE May futures. This could be partly due to the re-opening of the bioethanol plant, Vivergo.

However, with currency moves and cheaper freight, the threat around imported wheat from France, Germany and Denmark is now beginning to impact the market. Trade rumours would suggest that both German and French wheats are now arriving into the Humber and judging by the recent weakening of the spot market, we also believe this to be the case.

Further south, wheat prices are also at a greater-than-average premium to nearby futures for this current point in the season, due in part to feed wheat demand for the livestock sector. Even so, much-improved weather is allowing for some livestock to be returned to the field and we could therefore see feed demand drop.

This morning, feed wheat for May collection is valued at £150.00/T ex-farm. This is down from the £155.00/T ex-farm achieved at the early part of last week but buyer interest is good and worth some consideration for spot movement. As for feed barley, end-user demand has slowed over the past week and larger feed homes are now bidding into the market at the equivalent of £145.00/T – £148.00/T ex-farm. However, we are still looking for odd loads into more local, smaller homes that could pay slightly more to those of you who are flexible on collection – please speak with the office to discuss your requirements.

According to the latest crop bulletin from the European Commission, the recent wet conditions have delayed the planting of both spring and summer crops across much of Europe. However, the report also added that “there is still time to complete sowing within a suitable window without a significant impact on yields”.

AHDB have added that both the UK and France have experienced significant delays in spring barley planting as a result of excess rainfall throughout March. Generally, weather conditions improved in April and judging by last week’s heatwave which brought the warmest April day for almost 70 years, spring planting should be well underway for most.

It is also worth noting that despite much of Central and Eastern Europe experiencing another cold snap at the end of March, which negatively impacted the growth and development of winter crops, the European Commission do not believe there to be “any long lasting effects” at this stage.

Regardless, the weather across the continent and any subsequent impact on crop production will be a watch point for the markets over the next few months.

Although the dry weather in Argentina will lead to a considerable drop in the country’s soybean production this year, it has proved beneficial for harvesting progress. According to the latest report from the Argentinian grain exchange, this season’s soybean harvest is currently progressing at more than twice the rate of last season with almost 40% of the crop now harvested.

With 84% of the crop described as in either a “poor or very poor condition”, estimated yields currently stand at 2.5 tonnes per hectare. This is a significant downgrade from the 3.2 tonnes per hectare achieved last season – but remains slightly better than most trade expectations.

The old crop UK OSR market suffered an extremely volatile week last week with old crop values moving anywhere from £282.00/T ex-farm to £290.00/T ex-farm for May collection. Early bids in this morning are offering £285.00/T for spot collection.

Emma Croft