Wheat values under pressure as American maize corn planting progresses

The last seven days have brought a mixed week to the grain markets as both old and new crop values continue to fluctuate according to maize corn planting progress over in the US.

Current old crop feed wheat values are in the early £180’s/T ex-farm for spot collection, whilst late summer collection would probably offer a couple of pounds per tonne more. Milling premiums have been valued all over the place over the course of this last week as quality imports (particularly the new arrivals into the Hull docks) continue to dominate the market. There are the odd jobs for certain varieties at certain quality specifications, but these are available with limited tonnage and would have to be priced accordingly.

Trade volumes are mixed with some farm-sellers on the one hand making the most of the odd price rally, whilst others stubbornly (or perhaps ‘bravely’ would be a more appropriate word here) await the alleged ‘return to better values’.

New crop feed wheat values are currently in the early £170’s/T ex-farm for harvest collection, whilst October/November movement would make somewhere in the region of £174-8/T ex-farm depending on farm location and quality specification. New crop feed barley is currently trading at a £12/T discount to feed wheat.

Following on from last weeks ‘record’ maize corn planting progress; American growers appear to have taken a break over the weekend due to ‘heavy showers’ hampering field work. A warmer, drier outlook for the week ahead should however allow them to once again play catch-up in what is still deemed to be a ‘more than acceptable planting window’.

Elsewhere, the latest supply and demand estimates for the UK, courtesy of Defra arrived on trade desks towards the end of last week. Without squeezing the details into this column (please see the blog for more), let’s just say that the numbers were generally a little more bearish than the trade had anticipated.

Total imports for the current 2012-13 season are expected to top 2.5M/T (that’s three times the amount we imported last season and more than the current imports planned for Bangladesh), whilst total exports are expected to fall just short of 800,000/T. Industrial and Human usage is forecast lower, predominantly due to the current reduction in bio-ethanol production, whilst animal feed usage is forecast slightly higher; poor weather generally indicates more indoor animal feeding.

Consequently, UK wheat ending stocks for the current 2012-13 season are forecast at 2M/T – which means that there is more than 30% more wheat left on farm, in stores and within ports than there was at the end of last season.

Meanwhile, OSR values are slightly better this week on both accounts with old crop for spot collection around the £380/T ex-farm mark, whilst new crop for collection off the combine would make somewhere in the region of £345-48/T ex-farm. Concerns over the quality of Eastern European OSR crops and delays to American soybean plantings have been supportive this week.