Week Beginning Monday 6th February 2017

Old crop feed wheat values are unchanged this week following a week of further speculation but limited market movement. Fortunately for local growers, spot ex-farm values appear to be at a premium when compared with the rest of the country (according to this week’s Farmers Weekly) due to the impending re-opening of Hull’s bio-ethanol plant. Feed wheat for spot collection is currently valued in the region of £148.00/T – £150.00/T ex-farm.

As for new crop values, there is little change to report this week as the new crop London LIFFE wheat futures continue to trade sideways. Feed wheat for as available collection off the combine at harvest is today valued in the region of £130.00/T ex-farm whilst £135.00/T ex-farm looks realistic for movement before the end of the calendar year.

With Mr Trump’s Presidency now well underway, concerns are beginning to arise over the size of US stockpiles that we could expect to see at the end of the current trading season.

According to the US Department of Agriculture, the US produced record levels of both maize corn and soybeans this season. However, domestic demand for both commodities is expected to remain relatively stable year on year for the remaining six months of the trading season. This therefore means that in order to prevent ending stocks from increasing past the forecast level, the US will need an extremely robust export program.

The latest estimates from the USDA state that US maize corn production this season stands at a record 384 million tonnes whilst US soybean production this season is at a record 117 million tonnes. Since the beginning of the current trading season (which commenced on 1^st July), the US has exported around a third of the full season export forecast and just over 65% of the full season soybean export forecast. In other words, maize corn exports are already falling behind – and that’s before the arrival of this year’s South American corn harvest into the market place.

In addition to the above concerns regarding potential “Trump-based disruptions” to this season’s US export program, further worries have emerged regarding the competition from South America. As reminded by the HGCA, both Argentina and Brazil are also set for big soybean and maize corn crops this season and will also rely heavily on exports to clear up supplies.

Storage options are also more limited here, so we could expect a rather competitive start to their export campaign this season, adding further pressure to US export concerns.

Although already obvious, it will be worth keeping an eye on this over the coming couple of months.

Meanwhile, The Maltsters Association of Great Britain (MAGB) have this morning released their buying intentions from the 2017 crop (please see www.UKmalt.com to read the statement in full) and the statement is promising for UK growers.

UK Maltsters are likely to buy around 1.9 million tonnes of malting barley from the 2017 crop and MAGB and have helpfully split this into three nitrogen bands this year in an effort to “help growers understand the markets needs”.

1.65% and under for pot distilling – In the North of England, this specification will account for 62.43% of the spring crop and 4.17% of the winter crop.

1.66% – 1.85% for brewing – In the North of England, this specification will account for 13.28% of the spring crop and 13.47% of the winter crop.

1.85% and above for grain distilling – In the North of England, this specification will account for just 2.47% of the spring crop and 4.17% of the winter crop. To discuss your malting barley requirements for Harvest 2017, please contact the office.