Last week was an extremely volatile week for the old crop London wheat market.
The local physical trade had become extremely disassociated from the London LIFFE wheat future screen in recent weeks and the gap between the old and new crop futures had narrowed.
According to the AHDB, the delivered premium over futures into Yorkshire in April is now the highest in recent years. Feed wheat delivered into North Humberside and Yorkshire was reported at £160/T, a £13.35/T premium over the London LIFFE May futures. This could be partly due to the re-opening of the bioethanol plant, Vivergo.
However, with currency moves and cheaper freight, the threat around imported wheat from France, Germany and Denmark is now beginning to impact the market. Trade rumours would suggest that both German and French wheats are now arriving into the Humber and judging by the recent weakening of the spot market, we also believe this to be the case.
Further south, wheat prices are also at a greater-than-average premium to nearby futures for this current point in the season, due in part to feed wheat demand for the livestock sector. Even so, much-improved weather is allowing for some livestock to be returned to the field.
Feed wheat for May collection is valued at £150/T ex-farm. This is down from the £155/T ex-farm achieved at the early part of last week but buyer interest is good and worth some consideration for spot movement.
As for feed barley, end-user demand has slowed over the past week and larger feed homes are now bidding into the market at the equivalent of £145/T -£148/T ex-farm. However, we are still looking for odd loads into more local, smaller homes that could pay slightly more to those of you who are flexible on collection.
According to the latest crop bulletin from the European Commission, the recent wet conditions have delayed the planting of both spring and summer crops across much of Europe. However, the report also added that “there is still time to complete sowing within a suitable window without a significant impact on yields”.
Generally, weather conditions improved in April and judging by last week’s heatwave, which brought the warmest April day for almost 70 years, spring planting should be well underway for most.
It is also worth noting that despite much of Central and Eastern Europe experiencing another cold snap at the end of March, which negatively impacted the growth and development of winter crops, the European Commission do not believe there to be “any long lasting effects” at this stage.
Regardless, the weather across the continent and any subsequent impact on crop production will be a watch point for the markets over the next few months.