Farmers Guardian
News
Over The Farm Gate

Over The Farm Gate

This Is Agriculture - Sponsored

This Is Agriculture - Sponsored

DataHub

DataHub

Auction Finder

Auction Finder

CropTec

CropTec

LAMMA 2021

LAMMA 2021

Grain prices hold up against a backdrop of volatility

Weather worries, no-deal uncertainty, a tighter global market and Covid-19 continue to influence grain prices.

Share This

Grain prices hold up against a backdrop of volatility

Drier weather has meant more growers have been able to complete harvesting.

 

For many, quality was impacted by August rain and yields are disappointing.

 

The lack of UK wheat has supported British prices.

 

At the end of last week the quote for November 2020 feed wheat on the London LIFFE exchange was £177/tonne. Meanwhile, December milling wheat on the Paris MATIF exchange was €188.50/t (£173.40/t).

 

Prices are at their highest for more than two years.

 

The weaker pound is also supporting British prices.

 

The stalling UK/EU negotiations continue to put pressure on sterling.

 

If a deal is brokered then the pound could rebound, but if no deal is done then it will weaken again.


Read More

Keeping an eye on the grain market - September 10 updateKeeping an eye on the grain market - September 10 update
AHDB survey reveals milling and malting grain quality issuesAHDB survey reveals milling and malting grain quality issues
Talking Arable with Hannah Darby: Our five-year average rainfall has been on the climb, with harvest 2019 and 2020 being the wettestTalking Arable with Hannah Darby: Our five-year average rainfall has been on the climb, with harvest 2019 and 2020 being the wettest
Fears over wheat quality as wet weather continuesFears over wheat quality as wet weather continues

No-deal

 

The lack of UK wheat means exports are unlikely to feature heavily in the coming months in a season which may be disrupted by the effects of a no-deal. In the year to July the UK exported £188.6 million worth of wheat, according to HMRC figures, with 80 per cent of that total shipped to the EU.

 

The overall total was up 60.8 per cent on the 2018/19 season. Imports were £100m down on the previous season in 2019/20 at £230.6m, with the EU responsible for 45.3 per cent of that trade.

 

If there is no deal then wheat and barley trade could be subject to tariffs of more than €90/t (£83/t).

 

Barley prices this year are holding up despite larger production as growers switched to the crop when they could not plant wheat.

Global grain market

Although the lack of UK wheat is a major factor this season, the global market continues to drive sales.

 

The US Department of Agriculture’s September estimate was for a global wheat harvest of 770.490 million tonnes in 2020/21, only 3mt more than its August estimate and 0.8 per cent higher than last year.

 

Coarse grain production, which includes grain maize or corn, is estimated at 1.46 billion tonnes, down nearly 5mt, because of a reduced US crop.

 

Total grain production is estimated to be 2.4 per cent more than last year at a record 2.730 billion tonnes, with use up 1.9 per cent and stocks at 2.7 per cent higher at 841mt.

 

James Bolesworth, AgriCommodities director at CRM, said: “The September USDA World Agricultural Supply And Demand report has proved to be conservative in estimates for Russian wheat production, maintaining an estimate of 78mt, while we maintain a view that production will be close to 81mt, with further USDA increases likely in October."

 

UK oilseed prices have been supported by a lack of supply of British rapeseed, the weak pound and a tighter world market.

 

Chinese demand for soyabeans and maize has been strong in recent months, which is also supporting the market. However, lower oil prices due to world economy fears are keeping a lid on prices, along with adequate oilseed supplies in Europe. Prices on the MATIF exchange are struggling to break the €385/t (£354/t) barrier.

2020/21 harvest

 

Wheat may not have been a success for growers in 2020 but growers are returning to it.

 

AHDB predicts the 2020/21 wheat area could be similar to the five-year average of 1.802 million hectares.

 

Constraints on a larger area include the continued need to control black-grass and the lack of oilseed rape in 2019/20.

 

The crop is normally a good rotational break from wheat providing an entry back into wheat.

 

AHDB also calculates that wheat still delivers the best gross margin of any crop option, with an average of £897/ha for milling wheat, followed by £751/ha for feed wheat. The next nearest performer is malting barley at £540/ha followed by winter and spring beans at £512/ha and £507/ha respectively.

TwitterFacebook
Post a Comment
To see comments and join in the conversation please log in.

Most Recent

Facebook
Twitter
RSS
Facebook
Twitter
RSS