Week Beginning Monday 29th April 2019

THIS MORNING’S LONDON LIFFE WHEAT FUTURES:

  • MAY 2019 – £166.00/T (£3.90/T higher).
  • NOVEMBER 2019 – £147.50T (£0.60/T higher).
  • MAY 2020 – £153.00/T (£1.00/T lower).
  • NOV 2020 – £151.85/T (£0.85/T higher)

 

POUND Vs EURO

THIS MORNING – 1.1584

TUESDAY 23RD APRIL – 1.1558

MONDAY 15TH APRIL – 1.1573

MONDAY 8TH APRIL – 1.1622

MONDAY 1ST APRIL – 1.1623

MONDAY 25TH MARCH – 1.1637

MONDAY 19TH MARCH – 1.1676

 

According to AHDB, all grains have fallen globally this month as expectations for a well supplied 2019/2020 trading season mount. In the last 4 weeks alone, US maize corn has lost 7% of its value on the old crop, and 5% of its value on the new crop. Both old and new crop wheat over in the US have fallen 10 dollars per tonne over the past month.

However, old crop UK wheat futures appear to have bucked the trend this week, but this can be attributed to “technical trading of short positions” rather than anything concrete. Furthermore, the past week has been an extremely thin week of trading. AHDB added that “the total volume of trades carried out on the UK futures yesterday was the third smallest volume on record this year”. As a result, sellers should monitor the London LIFFE wheat market with caution – any movement on the screen is unlikely to be reflected within the physical ex-farm value.

 

Feed wheat for spot collection continues to trade in the region of £161.00/T ex-farm this morning, with a small premium offered for movement into the summer. Feed barley continues to trade in the mid £130.00’s/T but seller interest is minimal, particularly given the historical trend of feed barley rallying towards the end of the trading season. With the sheer volume of maize continuing to arrive into the country over the coming months, I would be surprised to see this happen this year.

 

As for new crop values, feed wheat has been extremely difficult to price over the past week due to the fluctuations within the London LIFFE market. £140.00/T ex-farm is negotiable on a good day for harvest collection, but is more realistic for September collection this morning. New crop feed barley is struggling to achieve £120.00/T ex-farm for harvest collection.

 

Looking ahead, large crops are still anticipated for Europe, Russia and the US. However, many sellers are clinging on to the threat of any potentially detrimental weather which could bring some challenges to growing crops.

Undeniably, soil moisture across much of the EU is below average. This has driven production forecasts to be trimmed over the past few weeks but the outlook is certainly much wetter over the coming weeks – rainfall for the UK, France, Germany and Poland will all be above normal over the next couple of weeks, which may ease some concerns.

 

Over in Russia, estimates for this year’s wheat crop have been revised higher to 83.4 million tonnes by domestic analysts. Regardless, some weather challenges do persist. “Southern and central areas, where the majority of the nation’s winter wheat is grown, has some emerging dryness concerns”. This will be worth monitoring over the coming weeks. May’s USDA report due in 2 weeks’ time may shed some light on this.

 

Last week, up to 30 inches of snow was threatening to arrive in key US maize growing states and with planting yet to get underway, concerns of a significant delay were circulating. This gave the maize corn market a short-term boost last week amongst a generally bearish outlook due to large end of season stocks.

However, global maize markets appear to have calmed this morning as the bulk of this detrimental weather was avoided. Last year, a late start to planting meant that maize corn plantings as of the end of April were just 32% complete. However, just a week later this figure stood at 75% and planting was easily completed by the end of May. Any headline grabbing stories should therefore be treated with caution! Any concerns could easily be quashed if a similar pattern is repeated this year.

 

Canadian canola futures have witnessed further falls over the past week. Nearby Canadian futures fell to their lowest price in over four years last weekend after falling over 13 euros per tonne over the past month. With limited canola exports over the past six months alongside good prospects for next season, the bearish outlook has obviously pressured markets. But what does this mean for the European market?

Despite the Canadian canola futures falling, during April nearby Paris OSR futures made small gains of 3.50/T euro. However, it is important to remember that there are GM restrictions in place in the EU, and the two crops are therefore not completely interchangeable. Regardless, we have seen imports of Canadian canola have increased in seasons where comparable discounts were recorded.

This will therefore be worth watching over the coming weeks, particularly for those of you who are either looking to secure harvest collection, or for those who still have old crop OSR in the shed.

Old crop for spot collection is valued at £305.00/T ex-farm this morning whilst harvest collection is valued at £302.00/T ex-farm.

 


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