Week Beginning Monday 26th February 2018

Old crop feed wheat for spot collection has continued to trade in the region of £140.00/T ex-farm this morning. Buyer interest is minimal in the spot position and isn’t much better for movement into the summer months either. We have however seen some interest in both group 3 and 4 soft wheats at a £5.00/T premium to feed wheat for April collection – please speak with the office to discuss your movement requirements.

As for feed barley, £135.00/T ex-farm is now being offered for spot collection.

New crop feed wheat is also unchanged this morning at £140.00/T ex-farm for harvest collection – this has been a consistent price over the last few trading days despite the fluctuations seen on the screen. Further forward, movement for the pre-Christmas period is now offered at £145.00/T ex-farm. This is proving rather popular this morning and with uncertain times ahead, it is perhaps not a bad price to start marketing next year’s crop?

Soybean prices in the US have continued to strengthen this morning on the back of ongoing weather concerns in Argentina as production prospects continue to decline. This is also beginning to have a ‘knock on’ effect within the wider European oilseed market although movement is limited given the firmer euro. Regardless, both old and new crop UK OSR values are slightly firmer this morning with spot collection offered at £293.00/T – £294.00/T ex-farm.

Below normal rainfall and slightly above normal temperatures are expected across Argentina over the next 15 days, with most of the major cropping areas still suffering from drought like conditions.

The market now has to establish if the Brazilian processors are able to take up the slack from the decline in soymeal availability, or if buyer demand is going to switch to the US. Either way, the US oilseeds market has decided that there is certainly enough risk involved and prices have fluctuated accordingly.

Furthermore, the confirmation given by the USDA last week during their annual Outlook Forum that China are “expected to exceed 100 million tonnes for the first time” next season, has certainly added fuel to the fire this week.

As advised by the latest European crop bulletin (please see the AHDB website for more), winter wheat across ‘large swathes of western and southern Europe’ could be at risk of winter kill if a severe frost strikes this week.

The start of 2018 has been significantly milder than usual across much of Europe with daily average temperatures in central, eastern and north-eastern regions 2-7 degrees above the long term average, leaving winter sown crops vulnerable to any sudden changes in temperature.

In relation to other weather concerns, rain deficits have been experienced in large parts of Portugal and South-Eastern Spain whilst there has been higher than average rainfall in Central and Southern France.

As far as the UK is concerned, temperatures have been slightly colder than usual over the past six weeks or so but if the ‘extremely cold weather’ forecast for the week ahead materialises, we could see winter wheat crops at risk.

According to the latest news from Mike Lee of Agronomy Ukraine, a sharp cold spell is also forecast for the week ahead throughout the Black Sea as temperatures begin to plummet. However, given the relatively mild winter conditions seen so far, concerns have been raised regarding the potential damage this change in forecast may cause. Mike Lee has commented that “parts of Black Sea farmland currently have little or no snow and plants have broken dormancy earlier this month, so it’s safe to assume some crops will now be at an elevated risk of damage from the cold”.

He also added that “whilst (he) doesn’t think we will see wholesale crop death, we could see a dent in yield prospects which had been running high after a good planting season and easy winter up to this point”.

This will be worth watching this week, particularly given the current pace of wheat exports from Russia at the moment.

Meanwhile the NFU elected their first female president last week as Minette Batters, a beef farmer from Wiltshire, takes office following in her father’s footsteps. Having co-founded campaigns such as; Ladies in Beef and Great British Beef Week she looks to lead the industry through ‘Brexit and beyond’.

Representing more than 50,000 farmers, she is keen to push British food. With British farming being in the spotlight like never before, she has highlighted the opportunity to “celebrate our high standards and drive global recognition that British food is quite simply some of the best quality available on our planet today”.

Thought of the week:

“For every acre of wheat we don’t grow in the UK, the rest of the world has to grow a hectare”

Jack Watts, NFU18.