The Grain Column with Emma Croft

Emma Croft, farm trader at Anderson Grain Marketing Ltd.
Emma Croft, farm trader at Anderson Grain Marketing Ltd.

Following another volatile week despite a rather unexciting USDA report, feed wheat values are back in the region of £140/T ex-farm this morning for October collection.

Further forward, £142/T ex-farm is offered for movement into the New Year – the benchmark £150/T ex-farm cannot be achieved until summer 2019 at the moment.

As for milling wheats, buyers continue to be ‘hand to mouth’ and premiums are refusing to fluctuate in accordance with the feed wheat market.

Full specification group 1 varieties have held firm at £150/T ex-farm despite the buoyant feed wheat market.

Soft wheats have done the same but at £5/T less at £145/T ex-farm.

As for feed barley, £127/T ex-farm is offered for November collection.

Despite the slightly drier weather this week, there are still patches of both spring and winter crops out in the field left to cut yet as this year’s harvest continues to drag.

Spring barley appears to be the most common crop left to cut and quality appears to be dropping by the day.

Further afield, Australian barley production forecasts have fallen back following last season’s record crop.

Production is due to fall 40% year-on-year to 8 million tonnes due to a decline in expected yields following below average rainfall across the key growing areas in recent months.

Globally, the International Grains Council have forecast a barley supply and demand deficit for the current 2017-18 trading season with production four million tonnes behind the required demand.

The overall decline in production is largely driven by declines in seven of the eight major barley exporters, with an increase in Russian production the only exception after a plentiful harvest.

Australian barley exports topped a record 9.1 million tonnes last season; this season we could see this fall back to just 6 million tonnes.

But have we seen the tighter global barley market start to manifest itself in a reduction to the wheat-barley premium in the UK?

In the lead up to harvest feed barley was trading at a £20/T discount to feed wheat for much of the early summer months.

Today, feed barley is trailing around £12/T - £15/T behind feed wheat values.

Although we cannot be certain, perhaps the tightness of the barley market is indeed having an influence.