Week Beginning Monday 26th November 2018

It has been yet another volatile week for the grain markets as the ongoing Brexit negotiations alongside Thanksgiving celebrations over in the US made the global markets a difficult place to navigate.

Yesterday, (Sunday 25^th November), the 27 other European Union leaders finally approved the terms of the UK’s exit from the EU. Moving forward, Mrs May will have until the 12^th December to “persuade” politicians within the UK parliament to back the deal. According to the BBC, the PM has pledged to put her “heart and soul into a two-week push” to convince MP’s to get on board with her plans.

The head of the European Commission, Mr Juncker, has added that “anyone in Britain who thought that the EU might offer better terns will be disappointed because this is the only deal”. Other EU members are said to have made it “very clear” that there would be “no further negotiations if the deal is rejected”.

Regardless, critics have disputed this, saying that the EU “would be willing to give ground to avoid a no-deal exit”. We will do our best to keep you updated on this over the coming weeks.

The May 2019 feed wheat future closed at the highest point since the end of October last week following gradual gains over three consecutive trading days.

Recent Egyptian wheat purchases have contained a higher proportion of US wheat than Russian which is against recent trends. The trade appears to be looking for any signals that Russian wheat exports may be slowing down so in the short term, this news added some buoyancy to European markets. However, Russia are yet to confirm that they have any intention of curbing wheat exports in any way.

The benchmark £170.00/T ex-farm is this morning offered for February collection whilst spot movement is valued at a significant discount to this due to a lack of buyer demand in the short term.

Feed barley values are generally aligned with wheat values although ex-farm prices can vary daily, again due to a lack of short-term demand.

As for new crop values, £155.00/T ex-farm is this morning offered for November collection. This is attracting a fair bit of interest amongst the farm-sellers, particularly for those who are yet to make a start on marketing next year’s crop. This represents one of only three opportunities in the last eight years to sell wheat forward at this level.

Winter wheat both here and on the continent looks extremely well and appears to be benefitting from the rainfall. Further afield, concerns for winter sown crops in the Ukraine are waning – they currently look to be in a better condition than last season. There are however some minor concerns regarding soil moisture levels in Northern Europe, particularly in France. Further rainfall will be required over the coming weeks and forecasts are mixed.

With both France and the Ukraine positioned as major global wheat exporters – all eyes are on this afternoons MARS report – it is hoped that this will shed light on the impact that the moisture deficit is really having on crops in the ground.

Elsewhere, according to AHDB, increased placings for broilers have led the charge for UK poultry placings to once again break records in October. Total UK poultry placings in 2018 were the highest on record for the year to date (Jan-October), at 981.6 million placings. Poultry feed accounted for approximately 47% of all compound animal feed produced so far this season (July-September 2018), and has steadily increased in quantity year on year therefore, “the continued upward trend of poultry placings could well increase retail feed sector demand for wheat this season”. Furthermore, usage of maize within the poultry feed sector is unlikely to increase by the same proportion for other species. One of the factors that broiler feed compounders must consider is the impact that maize has on the colouration of meat when altering feed blends – this could therefore limit the amount of maize used within this sector despite the ready availability and the relative price competitiveness of the grain.