Feed wheat values are significantly improved this week as the value of the pound falls to a three-year low against the value of the euro as Brexit plans finally begin to take shape.
As a result, UK grain values have firmed over the last ten days or so and ex-farm values are rallying towards the benchmark £130/T ex-farm for collection before the end of the year. Further forward, values are edging towards £135/T ex-farm for June 2017 collection.
Further problems at Hull’s bio-ethanol plant Vivergo this week has slowed buyer interest for short term feed wheat purchases and there is therefore a significant difference in values between spot prices, and prices for collection in December.
If you are looking to make a sale in the region of £130/T ex-farm, some patience regarding movement will be required!
As for feed barley, a distinct lack of buyer interest has results in values being largely unchanged despite the increase to wheat values - £110/T ex-farm continues to look like a realistic value for November collection.
Elsewhere, last week brought the release of the US quarterly stocks report (figures given are the figures as of 1st September) from the US Department of Agriculture, (figures given are the figures as of 1st September), and the results were mixed.
US maize stocks are estimated at 44.1 million tonnes – this is pretty much in line with last year’s figure and is marginally lower than what the trade was expecting.
For wheat, stocks are estimated at 68.8 million tonnes, a 10% increase on last year’s figure.
This is the highest US wheat stock level since 1998 and is much higher than initial trade estimates.
A “sluggish pace of exports last season and a good 2016 harvest” are said to be responsible for the large figure for estimated wheat stocks and the US market has traded accordingly with the bearish news.
However, with the recent weakening of sterling the UK wheat market has been unaffected by the news – it has more pressing issues of its own to contend with!
Meanwhile, forecasts for a wet Australian spring are starting to cause concern regarding both crop quality and quantity.
According to AHDB “a wetter than average spring is forecast across key growing regions in Australia and although it is early days yet, this will certainly be something to watch as October progresses”.