Week Beginning Monday 25th June 2018

New crop wheat futures have been falling globally, largely due to uncertainty regarding the US-China trade dispute and news of good harvest progress for winter wheat. Online reports are suspiciously minimal regarding US harvest progress but, twitter reports from the field are encouraging; yields may be average, but most appear thrilled given the poor outlook earlier in the year.

Closer to home, in a week that appears to have been flooded with bullish news throughout Europe, the London LIFFE futures have only half recovered the losses from the week previous as they are influenced by the wider market sentiment.

New crop feed wheat for November collection is this morning valued at £160.00/T ex-farm with feed barley trading at a £10.00/T discount to this at £150.00/T ex-farm.

As for those of you with any old crop left in the shed, ex-farm values are dropping each day as buyers begin to fulfil their requirements. £162.00/T ex-farm currently looks like a realistic offer for spot collection whilst £165.00/T ex-farm is offered for July.

In response to the US’s latest tariffs, as of last Friday (22^nd June), the EU is implementing retaliatory measures on US goods, worth 2.8 billion euros. This follows the US’ decision to implement tariffs of 10% on aluminium and 25% on steel products. EU measures apply to a variety of goods including clothing, whiskey and various agricultural products – including a 25% tariff increase on imports of maize corn from US origins.

This has certainly grabbed the farmers attention over the weekend, but the news is misleading.

In reality, according to AHDB, the impact of this is expected to be minimal as “US maize imports accounted for 5% of total EU maize imports from 2012-2017”. As for the UK, under 2% of total annual maize imports originate from the US.

Meanwhile, the EU commission last week released its latest crop bulletin with some significant revision of forecast crop yields due to the recent adverse weather.

In France, “wet and warm weather has raised disease pressure for winter crops, with fusarium head blight a noted concern”. In Germany, “hot conditions coinciding with sparse rainfall, especially in the north and east, has affected winter crops at flowering / grain filling. Elsewhere, higher than average temperatures are expected to have affected winter wheat during flowering in Austria and Romania.

Furthermore, yields of rapeseed and winter barley are estimated to also be affected following drought and heat stress.

On a more positive note, it is likely that the rainfall has benefitted winter crops in Spain, with upward revisions made to yield forecasts. Likewise, conditions for UK winter and spring crops were described as “largely positive” in the past 6 weeks with development progressing well (I’m not sure what some growers may think of this!)

With warm weather forecast throughout Europe for at least the fortnight ahead, attention will remain firmly focused on how these European crops develop throughout the final (crucial) growth stages.