At last, a degree of volatility has been injected into
global grain markets (albeit short-lived). The early part of the month saw dry
weather in the US push Chicago May’18 futures above $5 a bushel, with UK new
crop values following suit, peaking at £148-£150/t ex farm for November’18.
Values have subsequently receded back to £145-£146/t but the last four weeks
have shown how nervous global grain markets are towards a weather issue that
may affect prices, and this is before we head into summer.
Old crop values have also had a minor renaissance over the
last month; the ambition of end-users to buy hand-to-mouth coupled with the intended
reopening of the Vivergo bio-ethanol plant at Hull has seen spot wheat increase
by over £5/t to £151-£153/t depending on area. With spring still yet to ‘spring’,
harvest seems a long way off and so old crop demand looks unlikely to dip. At
this stage it’s very much a ‘six of one, half a dozen of another’ scenario,
however with the recent strengthening of the pound, European wheat imports are
virtually at parity with domestic values.
Barley continues its upward trajectory, peaking at
£142-£144/t for March, depending on location. A limited supply of feed barley
has ensured that values keep rising and it is certainly hard to see them
dropping at all in the short term. New crop barley is much harder to value;
there is very little liquidity further forward, and merchants will be reticent
to take too much of a position having had their fingers burnt this year. A
£10/t deduction to wheat would be a reasonable value to take and certainly
anything over £15/t difference would be far too cheap.
Oilseed rape (OSR) continues to be a broken record; April
levels remain at £290/t with very little carry further forward. It seems to
still be a case of who is going to blink first between growers and end users
and with a vast number of growers waiting for £300+/t. At this stage it would
seem that unless the soya market takes a serious upturn, values are likely to
remain stagnant.
Ammonium nitrate levels remain relatively flat but TSP
values have increased recently, which has in turn sent compound values higher.
With some fertiliser now starting to be applied on farm, prices a firming a
little so it’s probably wise to look at any further requirements sooner rather
than later.
