30 May 2018
Global grain markets continued to be influenced by weather forecasts and crop condition reports last week (18 – 25 May). New crop UK feed wheat futures climbed to another new contract high, closing at £158.25/t on Friday (25 May). With a mixed weather outlook going forward, challenging conditions look set to remain for Canada and Australia. Meanwhile the dry conditions in the US plains and the damage to wheat remains to be fully quantified.
Conditions in some key global wheat growing regions continued to be of concern. Australia remained dry, hampering planting and crop development. The Manitoba and Saskatchewan regions of Canada were also dry with rainfall required for crop development. Similarly, warm and dry weather has set in across Black Sea regions with crop conditions less than ideal. The US southern plains continued to lack moisture, and with harvest fast approaching crop conditions are unlikely to improve significantly.
In the UK, broiler chick placings are running at a record pace so far in 2018, up 5% on 2017 (Jan-April) and up 11% on the five year average, contributing toward animal feed usage in 2017/18 estimated to be up 3% on the previous year.
The latest UK wheat balance sheet is at its tightest in four years, reflecting reduced opening stocks. Looking toward 2018/19, opening stocks look like they may be below average once more. Meanwhile, domestic consumption of barley is set to reach the highest level since records dating back to 1991/92.
World oilseed markets rose both in the US and Europe last week. An apparent move forward on the US-China trade dispute was met with cautious optimism from markets. Elsewhere, wet weather hampered the Argentinian soyabean harvest and unfavourable weather across parts of Europe has caused concern for rapeseed yields, creating a bullish market tone.