Farmers Guardian
News
Word ‘milk’ banned for use in branding of plant-based products

Word ‘milk’ banned for use in branding of plant-based products

This Is Agriculture - Sponsored

This Is Agriculture - Sponsored

DataHub

DataHub

Auction Finder

Auction Finder

LAMMA 2020

LAMMA 2020

You are viewing your 1 free article

Register now to receive 2 free articles every 7 days or subscribe for unlimited access.

Subscribe | Register

Keeping an eye on the grain market: July 6 update

What to watch: The scale of the decline in the Russian crop will dictate global markets

TwitterFacebook
Share This

Keeping an eye on the grain market: July 6 update

Markets across the world are on a rollercoaster ride.

 

In the UK, the heatwave increased wheat prices to the highest in six years.

 

Weather conditions across Europe have led to analysts slashing crop estimates, resulting in further price volatility.

 

And rapeseed prices have strengthened this week, supported by declines in European oilseed production.


Read More

First wheat variety selection important in take-all reductionFirst wheat variety selection important in take-all reduction
New quality wheat gains industry backingNew quality wheat gains industry backing
Organic farms put wheat varieties to the testOrganic farms put wheat varieties to the test

Nov 18 LIFFE wheat futures closed on Wednesday, July 4, at £169.25/tonne - a rise of £9.35/t on the week.


UK - Record-breaking June

UK - Record-breaking June

UK wheat has continued to trade higher this week, reaching fresh contract highs across the board amid ongoing concerns after June 2018 was one of the warmest and driest Junes on record, according to the Met Office.

 

The average UK daytime temperature was 19.9degC in June, i.e. the same as in the well-remembered 1976 year and placing it second (records dating back to 1910) after 1940.

 

Since the beginning of the year, wheat has rallied nearly 20 per cent and it stands at its highest in six years when the November 2012 contract was trading at £178.50/t on July 4. Farmers have started pricing more feed wheat with the £160+/t widely available nationally, although they remained cautious sellers amid renewed yield risk.

 

Assuming a wheat planted area of 1.75 million hectares and a 5 five-year average yield of 8.2t/ha, the 2018 UK harvest is seen around 14.4mt. However, based on CRM Agri research and farmers feedback, yields could dropped below the 10-year average of 7.9t/ha and as such, the national crop would decline more than 10 per cent from last year and fall to its lowest level since the 2013 ‘accident’.

 

Anecdotally, last year, the November 2017 futures contract peaked on July 10.

 

Benjamin Bodart, CRM AgriCommodities


European - Markets react to weather concerns around Europe

European - Markets react to weather concerns around Europe

European markets are riding the global rollercoaster caused largely around anticipation of crop sizes and quality. The start of the week saw concerns expressed around thunderstorms crossing France, followed quickly by concerns over hot and dry conditions around other EU and Black Sea regions.

 

Analysts seem very quick to slash crop numbers which is creating further uncertainty and price volatility which may need to be corrected when combines really get into the bulk of the crop. There will always be crops that don’t perform, but perspective is something that often gets forgotten in the heat of the moment.

 

Price relationships between other markets and commodities also seems to be easily forgotten and while the EU 28 remains one unit it should not be forgotten how easily crops can travel across countries and that while some crop numbers are being cut in exporting countries, others from importing countries are edging higher.

 

Other impacts on trade flows and price implications, such as the new US maize import tax and how it reacts with the mechanism of the EU maize import levy, remain less clear, but either way maize prices could be the commodity to watch.

 

Cecilia Pryce, Openfield


Global - Scale of Russian decline will be influential

Global - Scale of Russian decline will be influential

With the US enjoying its Independence Day holiday, market focus is now on this Friday’s US/China tariff deadline. Fund selling has enabled fresh contract lows to be posted on both US soy and corn markets, spilling sentiment over into the wheat pits.

 

US weather is still a mixed bag, with continued hot and dry weather in the Southern Plains and ongoing rains across much of the Delta, East and Midwest regions, where a ridge of hotter weather is expected into the weekend.

 

US spring crop ratings slipped slightly on the week, although crops are still generally in good condition, and could support record yields.


Traders are on watch to see if the hotter weather causes any deterioration to the US corn crop but, with plenty of recent moisture, any crop stress may be limited.

 

US winter wheat harvest is now over 50 per cent complete with Texas, Oklahoma and Kansas almost finished, which will limit further potential yield losses.


Russia’s Ag Ministry reports that 5 per cent of the grain area is harvested, with average yields almost 15 per cent lower year-on-year, at 3.82t/ha. If continued, this would project a wheat crop of circa 72mt, the top end of current estimates.

 

The scale of the decline and final production will be influential. With cereal crops also being talked down in Europe, the global export matrix for 2018-19 may need a major realignment.


This may provide some dynamic regional pricing over coming months.

 

David Woodland, Gleadell


Oilseeds - Rise in OSR prices

Oilseeds - Rise in OSR prices

Oilseed markets have strengthened this week, supported by declines in European oilseed production. The first cuts of rapeseed in France are showing lower yields than last year, they are estimated to be down around 0.5t/ha. Crop analysts, Monitoring Agricultural ResourceS has reduced its estimate for the overall EU oilseed rape crop to 20.8mt.

 

This is 1mt lower than previous forecasts due to lower production in the Baltic countries, Poland and Germany. Romania is around 70 per cent cut now but yields are starting to decline slightly as the harvest moves north.

 

However, elsewhere in the world production has the potential to increase, particularly in relation to Canadian and Australian canola crops. Crop analysts, Statistics Canada has raised its canola plantings to 22.7m acres – 1m higher than its April figures. Australia has also increased its planted area of Canola, which has added around 150,000t to its production estimates.

 

US soybean crops are on track and in excellent condition, but trade problems with the US and China remains in the forefront of the US trade.

 

Zoe Andrew, Frontier

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

Most Recent

Facebook
Twitter
RSS
Facebook
Twitter
RSS