Grain report

Emma Croft of Anderson Grain Marketing Ltd
Emma Croft of Anderson Grain Marketing Ltd

Feed wheat values are unchanged this week following a lack of fresh news and a subdued UK market.

Rumours would suggest that Hull’s bio-ethanol plant, Vivergo, should be fully up and running by this time next week which is good news, particularly for those of you who are looking for short term movement.

Feed wheat for February collection is currently valued in the region of £107.00/T ex-farm. For those of you looking to make a sale at £110.00/T ex-farm, April/May collection continues to look like a realistic offer. As for feed barley, £96.00/T ex-farm is offered for February collection.

Meanwhile, new crop values are volatile and the London LIFFE wheat future for November 2016 is currently valued in the region of £123.00/T.

Pulling the value upwards is the ongoing speculation regarding the Black Sea winter crops; Pushing the value downwards is the constant reminder that regardless of any impending issues regarding next season’s crop, we should expect a significant carryover of stocks from the current season.

The latest update of the International Grains Council’s (IGC’s) monthly grain report was released towards the end of last week and contained some mixed, although generally bearish sentiments for the grain market.

The report forecasted global grain production to be lower overall, but simultaneously made even larger reductions to global consumption. As a result, global grain ending stocks are now forecast at a staggering 455 million tonnes – a 29 year high.

Closer to home, concerns regarding the slow pace of European wheat exports ‘received a respite last week’ with the announcement that Egypt had bought 120,000/T worth of European wheat in its latest tender.

Both French and Romanian wheat supplies accounted for the above equally and a further 115,000/T of Russian wheat was also secured for March delivery.

However, it is important to remember that season to date European export licenses (1st July – 22nd January) are 14.02 million tonnes, a 13% decrease on last year’s season to date total. We will need to see plenty more of the above if Europe are to play catch up with next year’s total.

Market speculation is mixed regarding the lack of fresh commitments from Argentina; should we be concerned regarding the quality of the crop given that harvest is yet to be completed? Are there issues regarding December’s trade with Egypt? Or is it simply because European wheat values are now effectively competing given the recent price decline?

Either way it seems to be fairly clear that the UK is way down Egypt’s list of potential suppliers.