Feed wheat markets are unchanged once again this week following the release of this month’s rather uninspiring WASDE.
Feed wheat for spot collection is currently valued in the region of £102/T - £104/T ex-farm and movement is beginning to slow.
Vivergo, Hull’s bio-ethanol plant, appears to be ‘experiencing some technical difficulties’ at the moment with either limited or no intake for a week.
This is adding pressure on merchants to keep things moving as May approaches; with two bank holidays and therefore two shortened weeks ahead, it isn’t exactly the time for getting behind!
This month’s World Agricultural Supply and Demand Estimates (WASDE) didn’t reveal anything overly exciting and whilst the report was ultimately bearish for the market, the numbers were marginally more favourable than initial expectations.
Global wheat production for the current 2015-2016 was forecast at a record 733 million tonnes, a slight increase on last month’s figure. European production was raised by a further 1.5 million tonnes on last month’s estimate to a record 160 million tonnes.
As for the US, production is forecast at a reasonable 55 million tonnes.
However, it is important to note that around 27 million tonnes, almost 50% of the total amount produced will be carried over into the next trading season. If realised, this will be the largest ending stock figure since 1987.
Global ending stocks were also raised to a record 239 million tonnes.
Meanwhile, new crop OSR values have continued to rally this week as heavy downpours over in Argentina appear to be both delaying harvest progress and significantly damaging crops.
At least 900,000 hectares are believed to have been affected by the rains and could potentially be left unharvested. As for the week ahead, heavy rains are expected to continue throughout the affected area causing ‘significant concern’ amongst the trade – this will certainly be one to watch, particularly if you are looking to commit OSR for the harvest period.
Also, Chinese customs have this week reported that they imported 6.1 million tonnes worth of soybeans in March; this is the highest level of soybean imports since 2008. Although this is not unusual for the time of year given the ‘seasonal arrival of South American supplies’, the figure appears to have surpassed trade expectations.
OSR for September collection is currently valued in the region of £270/T ex-farm. For those of you looking for immediate movement off the combine at harvest, £265/T ex-farm currently looks like a realistic offer.
As for old crop values, £275/T - £278/T ex-farm is currently offered for May collection.