Wheat marker retreats to 12 month low

The last seven days have brought an undeniably bearish feel to both old and new crop grain values. Old crop feed wheat has fallen almost £12/T on the trading screen since my last column and although physical ex-farm values haven’t fallen quite so sharply, the retreat seems to have set the scene for the remaining few weeks of the 2012-13 season.

As I write, feed wheat for spot collection would make somewhere around the £175/T mark, as would many offers for July movement – the lowest value we have seen for front month feed wheat in almost a year. End-users appear to be well covered ahead of what could be a potentially late harvest and buyers are therefore becoming increasingly thin.

As for anything with quality, end-users are again well covered and thus buyers are also limited. There is, as always, the odd job available for the odd variety, but these would have to be priced accordingly. It was confirmed last week by AHDB that the use of imported wheat by our domestic millers between 1st July 2012 (the start of the current season) to 30th April 2013 topped 1.5M/T; almost double the amount used in the same time period the year previous. It is hardly surprising then that Group 1 milling wheat premiums have fallen around £35+/T since the October 2012 highs of £55/T.

As for new crop feed wheat, September collection is barely worth £170/T at the moment whilst November collection would probably put values somewhere in the very early £170’s/T. Feed barley is currently trading at a £12-15/T discount to feed wheat.

The latest update I can source from America is that maize corn growers have now planted around 91% of their intended acreage, just marginally behind what we would normally expect at this stage in the season. Plants are said to be establishing well in a climate which currently boasts mild temperatures and ‘adequate’ rainfall.

Meanwhile soybean plantings stand at 57% complete against a five year average of 74% at this stage in the season. This represents one of the slowest planting paces in recent years but is not yet perceived to be a significant threat to yields (‘yet’ being the optimum word here). Soybeans have a much larger planting window than maize corn and even if drilled in late June, crops can produce good yields if conditions are favourable.

Current values for old crop OSR are around the £375+/T mark whilst new crop OSR for collection off the combine would make somewhere between £333-338/T – This could however look slightly different if the above soybean planting delays continue for a further three weeks.

Elsewhere Black Sea spring grain plantings are coming along well with The Ukraine not far off completion, Kazakhstan around 95% complete and Russia around 90% complete (which includes a record 29.6M/Ha of maize corn).

With the annual cereals event taking place this week leading to many traders absent from their desks, and this month’s World Agricultural Supply and Demand Estimates (WASDE) due from the US Department of Agriculture (USDA) today; it could be an interesting week ahead.

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