Week Beginning Monday 4th June 2018

New crop wheat futures have a suffered an extremely volatile although shortened week following last Monday’s Bank Holiday market closure. Global weather concerns, shortly followed by alleviated weather concerns, which have once again been followed by more weather concerns are shifting the London wheat futures daily.


The London LIFFE wheat future for November 2018 has this morning opened £0.25/T higher from Friday’s close at £158.50/T. As a result, feed wheat is this morning valued at £160.00/T for pre-Christmas collection.


As for old crop wheat, feed is this morning offered at £165.00/T for spot collection. Further forward, opportunities for movement into July / early August are limited – the majority of trade interest at the moment is to fill spot short positions.

Milling opportunities keep arising for both full specification group 1 wheats and group 3 soft wheats. Premiums are varied depending on the day – up to £15.00/T was offered last week for full specification group 1 wheats.


Dryness continues to be an issue in much of Germany, Poland and other eastern European areas. However, much of Southern Europe continues to show cooler temperatures and above average precipitation which have been welcome given the hot, dry start to spring.


A fall in grain production due to continued dry weather over in the Ukraine is now looking likely according to Reuters. Since the start of April, the accumulated precipitation throughout the Black Sea area is currently only 53% of normal levels and is an increasing concern moving forward.

Yields for both winter wheat and winter barley are now predicted to fall by 0.3 tonnes per hectare from year earlier levels in the Ukraine, taking total estimates down to 3.8 tonnes per hectare and 3.1 tonnes per hectare respectively. Further downgrades are rumoured to be imminent – this will certainly be worth monitoring over the coming weeks.


It is also worth reminding that Russia is now the world’s top wheat exporter, having overtaken both the US and the EU in 2017/18. Furthermore, Russia’s share of global wheat exports is estimated to have doubled over the last ten years from 10% in 2007/08, to 22% in 2017/18. Any Black Sea weather issues and thus potential threats to supply can therefore have a significant impact on the global new crop market.


Meanwhile, improved weather forecasts for North American key spring wheat growing areas are doing their best to evaporate the above bullish sentiment.

The US plains have been suffering from below average precipitation, providing less than ideal growing conditions. However, increased rainfall is now forecast for key growing areas in the northern region, alleviating concerns. Regardless, the dry weather did at least allow for the crop to be drilled in the first place following initial delays – 95% of the intended area was in the ground by the end of May.

It will be interesting to see if the wetter forecast materialises over the coming weeks and the subsequent impact this could have on the already volatile new crop futures.


After topping £298.00/T ex-farm last week, old crop OSR values have retreated to £292.00/T ex-farm this morning and time is running out for those of  you with old crop still in the shed!




Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.