The grain column with Emma Croft
Old crop feed wheat is currently valued in the region of Â£142/T ex-farm for spot collection.
As for new crop, feed wheat continues to trade in the region of £135/T ex-farm.
Buyer demand appears to have fallen quiet this week; the warm and wet weather experienced over the last fortnight or so appears to have boosted their confidence in plentiful grain production this year and consequentially lower value next season.
Also, with today’s General Election now underway many are reluctant to make any large commitments.
The latest production figures from the EU commission grabbed the markets attention last week – total grain production in the EU is forecast to reach 304.8 million tonnes next season, a 3.5% increase on the estimated output for the current trading season.
Looking in detail, soft wheat output is expected to rise by 5% on this season’s output at 141.3 million tonnes.
For barley, production is forecast as unchanged despite the increase in acreage at 59.5 million tonnes.
This is probably due to the less than ideal weather, particularly for spring drilled crops.
With regard to origins of output, total grain production in France is expected to rise by 20.5% on the year in 2017, while the commission currently have total UK grain production at 2.3% higher.
Although we could see a lot of changes between now and harvest, it is important to note that despite the recent weather issues, European production estimates are yet to decline from both the initial estimates and last year’s estimated production numbers.
According to last week’s USDA crop condition scores, 50% of the US winter wheat crop was considered to be in a “good to excellent” condition.
This is just a 2% decline on initial estimates, but a more significant 13% decline on the year previous. Regardless, the latest figure remains 5% above the five year average.
With 80% of the winter wheat crop in the US now at ear emergence, condition ratings will become increasingly relevant to gauging where final harvest yields may be and will therefore have a greater influence on market direction.
This will certainly be something to keep an eye on over the next couple of months – the Chicago wheat market is already responding to the weekly updates.