Week one of Brexit talks is now well underway and the value of the pound against the value of the Euro has therefore been extremely volatile this week. The early sessions are described as a “trust building exercise” and there are currently no major developments to report of.
Regardless, the grain market has edged higher over the last couple of days as the trade nervously awaits further news regarding the ongoing negotiations.
Old crop feed wheat for spot collection is approaching the £150/T ex-farm mark on Tuesday but buyer interest is limited.
With almost a £10/T premium to the new crop wheat value at stake, local end-users appear reluctant to commit ahead of what looks like an early harvest, particularly following a weekend of bright sunshine and high temperatures. Please contact the office to discuss your movement requirements.
As for new crop feed wheat, £140/T ex-farm for as available movement straight off the combine at harvest is being offered to most this morning. Further forward, £143/T ex-farm for November currently looks like a realistic offer.
As fears ease over dryness in Northern areas of the US, market attention has turned towards Australia’s recently drilled wheat crop which is currently struggling to establish itself due to “extremely dry” conditions. According to Agrimoney.com, “soil moisture levels are at a record low” in Western Australia, the key wheat producing area.
Levels are also “firmly below average” in South Australia, New South Wales and Queensland.
Current forecasts for the coming season’s Australian wheat crop are in the region of 23 -24 million tonnes with local forecasts currently at the lower end of this spectrum. As the country heads into the cooler, less vigorous winter phase of the growing season, the crop is running out of time to germinate and establish itself and it will need the arrival of moisture in order to do just that.
Recent weather forecasts are dry along the west and southern coast for at least another 10 days – this will certainly be something to watch over the coming weeks. Domestic values have already risen by 20 dollars over the last few trading days and the rally looks set to continue.
Closer to home the recent wet weather across central Europe appears to have benefitted both French and German crops.
Combines are already rolling throughout barley crops in Southern France and according to several twitter based reports, results are encouraging.
Some are concerned that the weather has simply been too extreme for spring drilled barley crops but for now, many are reaping the rewards of a mild and wet period as crops emerged from winter dormancy.