Grain column with Emma Croft

Emma Croft, farm trader at Anderson Grain Marketing Limited.
Emma Croft, farm trader at Anderson Grain Marketing Limited.

The grain markets for both old and new crop grain have fallen extremely quiet this week ahead of the all important European Referendum.

According to the latest online polls by Opinium and YouGov, both sides were neck and neck this week with both ‘Vote Remain’ and ‘Vote Leave’ receiving 44% of votes each.

This leaves a staggering 12% still undecided with a matter of days left to go. Perhaps the momentum enjoyed by the leave campaign over the last couple of weeks has begun to stall?

As for the BBC’s latest online poll, the results of which were released at the beginning of the week, the Remain vote took a slight advantage with 45%, a marginal victory against the leave vote at 42%.

Again, a significant proportion of voters remained undecided with less than a week to go.

It has been an interesting few weeks tracking the London Wheat Market ahead of today’s vote; as we entered the month of June and the referendum date loomed, results of daily online polls, various television debates and fluctuating global currencies have all added volatility to the market.

Of course there are no real guarantees that the outcome of the referendum will bring any change to the market, but general market opinion would suggest that a successful referendum for the leave campaign would result in the weakening of sterling and a subsequent move upwards for UK grain values.

On the other hand, a Remain vote should ultimately strengthen sterling, making UK grain appear uncompetitive within the global market. In this situation, the value of UK wheat would probably decline.

It is important however to recognise that the above is of course completely theoretical and is the very basic summary of general market opinion, there really are no guarantees either way!

Furthermore, we could see some short-term discrepancies regarding the physical value of wheat; the ‘suits in the city’ may have different ideas to both the physical buyers and end-users.

But what does this mean for farm sellers?

With no assurances promised either way, I think it is important to remain focused on target values.

£120/T ex-farm has been a benchmark figure for many farm sellers looking to secure harvest movement for almost six months, yet when this value was briefly offered at the beginning of last week due a sudden weakening of sterling, very few took advantage of the opportunity.

As the results are announced on Friday 24 June and the London wheat market begins trading in accordance with final decision, keep those target figures in mind; whichever way the referendum goes, there could be an opportunity worth trading.