Wheat Values Ease Following Ukrainian Referendum

The London LIFFE wheat future for March 2014 closed at £166.80/T on Friday evening (14th March) – £2.15/T firmer than the week previous. Feed wheat for spot collection was valued at £170/T ex-farm by mid-week (a 5 month high) and buyers appeared keen ahead of the weekend’s referendum over in Crimea.

As for new crop values, the wheat future for November 2014 closed at £159.35/T – £3.60/T higher than the week previous. £150/T ex-farm for as available collection was offered by Wednesday morning and was extremely popular with farm sellers with a number of growers making a start on marketing next year’s crop.


Following yesterday’s controversial vote, the results of which ‘overwhelmingly favoured’ leaving the Ukraine, Crimea’s parliament has this morning formally declared independence from the Ukraine and has asked to join the Russian Federation – despite Europe and the US declaring the referendum ‘illegal’.

Consequently, western talks regarding ‘sanctions against Moscow’ are to begin this afternoon which for the minute appears to have halted the recent price rally evident in the UK grain market. Many traders (including myself) anticipated a further rise this morning, but have instead been met with a decline. Perhaps yesterday’s fairly unsurprising outcome was already factored in to last week’s price gains?


Aside from the ongoing Political unrest, the Ukraine’s winter wheat crop (due to be harvested in June/July) looks well and prospects for their spring sowing efforts look favourable. Agrimoney.com has raised some concerns regarding certain imports, specifically ‘plant-protection chemicals and hybrid seed’ but these are yet to materialise.

Volumes of maize corn and wheat have continued to be exported ‘unhindered’ over the past week, adding limited short-term pressure to alternative supplies. It is buyer confidence further forward that is now in question, particularly as the Ukrainian wheat harvest is due to begin in as little as 12 weeks time – despite the weak currency offering completive values, are Ukrainian wheat supplies a safe bet for harvest delivery? 


In opening trade this morning, old crop wheat futures have opened around £2.50/T lower although the majority of the trade appears to be keeping its head down, presumably awaiting further Russian-inspired direction.

Ex-farm values are only moderately lower this morning with £170/T still offered but for April/May collection depending on farm location and quality specification.

Feed barley is continuing to trade in the region of £140/T ex-farm depending on movement requirements.


As for new crop values, the London LIFFE wheat future for November 2014 has opened £2.35/T lower this morning.

As available collection for feed wheat would still make £150/T ex-farm although November movement is lightly lower at £155/T ex-farm – £157-158/T could have been negotiated at certain stages last week.

Are buyers anticipating a tight supply and demand situation come harvest? 


The current dry weather across the American plains is set to continue for the week ahead with no rain forecast for the ‘struggling’ south-west areas were winter wheat is beginning to ‘break dormancy’. ‘A few rain and snow showers should provide some relief in the east’ but this will hardly be enough to provide ‘adequate relief’ – a general trade concern regardless of the Crimean situation.


Meanwhile, OSR values for spot collection have retreated to around £320/T ex-farm this morning – £13-15/T lower over the last seven days. Whilst general market uncertainty regarding the Ukraine is keeping values buoyant, a lack of Chinese demand over the last fortnight is beginning to take its toll on European values. Several cancelations of Chinese destined South Americans soybean exports appear to have shaken trade confidence, pressuring current values.

Furthermore, the recent wet weather in Brazil across the south-east is said to be have been ‘largely favourable’, easing dryness concerns there. Consequently, new crop values have also shows signs of retreat this morning with current values for as available collection now in the region of £280/T ex-farm.

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