Following a quiet few days as the trade slowly returned to work last week, normality appears to have resumed this week and the value of old crop UK feed wheat appears to be on the rise.
Old crop feed wheat for spot collection is currently trading in the region of £142/T ex-farm whilst
£145/T is offered for March collection. With Hull’s bio-ethanol plant currently closed for a six-week maintenance period, short-term movement has slowed, hence the premium offered for movement further forward.
As for the milling trade, full specification milling wheat’s are currently valued in the region of £147/T ex-farm for January collection although buyer interest is extremely limited.
Further forward, £150/T for March/April collection would seem realistic if we could find some local buyer demand.
Currently, the only interest is coming from the West (Manchester/Liverpool) and the additional haulage costs are thinning the premiums.
Feed Barley values are unchanged at £120/T ex-farm for spot collection, Old crop OSR values are currently valued in the region of £350.00/T - £355.00/T ex-farm for spot collection. Soya values are unchanged from their pre-Christmas position as the trade awaits news from this year’s South American harvest.
With the soya market unchanged, the recent movement should be largely attributed to currency, notably the weaker pound.
As for new crop values, movement on the November 2017 LIFFE wheat future is slower, but it does appear to be creeping back towards the £140/T mark. Many growers are looking at £135/T ex-farm for harvest collection which could be a realistic mark if the pound continues to weaken.
Alongside ongoing currency fluctuations, various weather issues have also grabbed the market’s attention this week.
According to the latest DATA published by the USDA earlier this week, cold, dry conditions throughout December “has hindered wheat conditions throughout the US Plains”.
Oklahoma is said to be the worst affected state with just 25% of the states crop rated in a “good/excellent” condition; a year ago, 77% of the crop was rated in this category. Conditions in Kansas have also declined with just 44% of its crop now rated in the “good/excellent” category.
As both Oklahoma and Kansas are the top two winter wheat growing states in the US, markets have demonstrated some initial concern regardless of the fact that “there is often little correlation between winter weather patterns and final yields”.
Looking ahead, snow is expected to spread across western areas over the coming days which could prove beneficial – this will be worth monitoring over the next couple of weeks.