As of last weekend, en estimated 100,000 hectares worth of cereals and oilseeds had been harvested across the UK following a week of mainly dry and bright weather. Since then however, little progress has been made although things do look slightly more promising for the upcoming Bank Holiday weekend.
According to the HGCA, ‘wheat was the main beneficiary of the recent good weather as it coincided nicely with crops reaching maturity’. They also estimate that around 45% of this year’s winter wheat crop is now safely in the shed. Locally, this figure is a little optimistic; I would estimate that around 25% has now been harvested.
Nationally, early yields have been in line with the five year average although there are some significant regional variations at this stage. Locally, yields are mixed but the majority of samples I have seen have achieved at least the five year average although many are struggling to see a repeat performance of last year.
Prices have been volatile over the last week or so and the London LIFFE wheat future trade screen appears to be fluctuating once again in accordance with the euro/pound /dollar exchange rates. Generally speaking, the value of the pound has strengthened over the last few days, hence the decline in new crop wheat values.
Elsewhere, concerns regarding both the quality / quantity of this year’s French and German wheat crops have continued.
German wheat output is now estimated in the region of 24 million tonnes – this is a 1.2 million reduction on the initial pre-harvest estimates and if realised, it would be the smallest crop seen for four years.
Over in France (Europe’s leading wheat exporter), exports of soft milling wheat to non-European countries are expected to fall by as much as 60% this season according to various French shipping companies.
However, the above is doing little to influence the market at the moment as market attention remains focused on the Black Sea wheat harvests.
This year’s Ukrainian wheat harvest is almost complete and according to the local authorities there, average yields are in the region of 4.28 tonnes per hectare, a slight increase on the 3.94 tonnes per hectare achieved last year. Elsewhere, Russia’s wheat harvest remains on track as a record breaker and local authorities there have this week updated their estimate to 69.5 million tonnes – this is slightly behind the 72 million tonnes estimated by the USDA in this month’s WASDE, but either figure would be a record for the country.
However, both storage and cash flow issues are a problem in Russia and this season’s wheat export campaign is expected to take off with a flying start; they could be fierce competition within the global market place until at least the New Year.