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23rd April Market Report


Domestic Weather

In the last ten days UK weather conditions have been ideal, both for getting spring crops sown and for winter crops to develop through their growth stages, in some cases in record time, one Dover based XL wheat grower commented “ I don’t remember such a short period of time between T0 and T1 chemical application timings”. The longer term forecast is looking good, with the south dry but cooler than the high temps seen last week (27◦C in places), the north looks to be more changeable. Ultimate conditions are good for crop development, which is a real positive considering the delayed spring.

Worldwide weather

While there doesn’t appear to be any significant weather issues around the world, the recent dry conditions in the USA have now received significant rains, which has now taken the “weather premium” out of the Chicago and Kansas based wheat market. Larry O’Shea from Mikes Trading commented, “ the mid-west farmers are more relaxed now, they will still be able to feed the cattle”.

  • Feed Wheat remains highly sort after in the north of the country, while many traders in the south are looking for homes for full spec Milling wheat at a competitive value in comparison to the feed wheat bids of the ethanol plants. A Haulage calculation will see milling wheat continue to migrate north, however the potential for London Futures wheat longs to be left with feed wheat in Kent is causing the futures market to trade erratically. One observer on Twitter commented “Just the right moment for a Wingham tender on next weeks (tomorrow) first day”. With continually higher import numbers, the homes that Kent wheat can travel to look numbered
  • Barley; FB remains in short supply, although the recent “turnout” will see the demand wane slightly. However barley beef will continue to consume as store animals are finished off. Malting barley, now looks to be nearing this year’s conclusion, as many buyers look to securing new crop cover. The recent weather improvement have seen them more relaxed, as growers have got spring barley through the ground.
  • Oats; most consumers are covered between now and harvest, with many looking to buy August & September positions. Demand for Oats continues to improve, with relative values to wheat still firm.

Old crop Matif futures are now heading into expiry. Prices have very much maintained £285-£290 Ex Farm, a combination of cheap import bio-diesel from Indonesia and Argentina has meant that bio-diesel plants in Europe are having to close down.

Domestically the crop is very geographical with excess in the North and very little left in the South. Having said that crush margins are still reasonably good but only in the spot position. With harvest 12 weeks away any potential old crop price rally will

literally go down to the wire.

New crop prices are also stuck but with a crop in the ground potentially a month late a significant weather/currency/harvest event could yet lend support to prices but with a bigger EU crop and the issues with South American bio diesel imports it’s hard to see prices

reaching the levels of the last few years.

Demand for old crop Feed Beans now becoming static as we move into the summer months. Exports of Human Consumption Beans are 50% down on last year, while Feed Beans are slightly up. Compounders use of DDG’s as a replacement has meant that on paper

There could be a carry out of 100,00omt. New crop on the other hand could be very interesting, while there is a large Winter crop out there the Spring Crop is still being drilled but is a good month behind optimal drill dates. Having said that it is going into moist, warm

seedbeds which might claw back some of the deficit.

Old crop peas potentially could be in good demand if they have good colour given the drilling problems associated with the current weather patterns.

Markets are becoming technical and in turn more volatile. However this is eradicating any fluidity in amongst the market place. Old Crop London wheat futures have dropped £5 since highs on 18th April whilst New Crop values have stabilised. 

Physical trade has dried up parallel to the recent weather. The weather in recent days has given the opportunity to get on the land, which is music to the growers' ears. However, this has slightly stifled the market of fresh origination and slowed down the impact of the declining futures. 

At long last there has been a window of opportunity to get on with spring land work and hopefully not too late to achieve a reasonable yield for spring barley.

Apart from the standing water patches the autumn plantings look as though they have come through the cold, wet spell pretty much unscathed. Whatever happens though seed certifications continue to show that we will produce a 14.5-15Mt wheat crop?

David, Rob and Jonni

David, Rob and Jonni

MARKET REPORTS

David, Rob and Jonni

David, Rob and Jonni

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