MI Northern Ireland Market Report

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18 July 2018

New crop (Nov-18) UK wheat futures prices fluctuated last week.

The contract fell £6.15/t by Wednesday 11 from the Friday 6 high, as prices were pressured by reports of good crop conditions and progress in the US. Some of the loss was then recovered, closing at £169.50/t on Friday 13 July, down £2.40/t on the week with support from the continued dry conditions and concerns over European wheat production.

The USDA cut its estimates of world wheat supplies and stocks in 2018/19. In its latest World Agriculture Supply and Demand Estimates (WASDE) the department has cut its estimate of global wheat ending stocks, down 5.3Mt to 260.9Mt. The ending stocks down due to production cuts in Russia, Australia, Ukraine and the EU following dry conditions.

The Association of German Farm Cooperatives cut its 2018 German wheat production forecasts to 21.53Mt, a 12.1% reduction on the year and a 1.36Mt reduction from its June estimate.

The 16 July USDA Crop Progress report placed the proportion of the US maize crop in excellent condition 8 percentage points higher year on year. Additionally, the July USDA WASDE raised the 2018/19 US production forecast to 361.46Mt. This is up 4.83Mt from the June estimate, but still a 9.5Mt reduction year on year. With the areas of Iowa and Illinois abnormally dry, subsequent US Crop Progress reports will be closely watched for any signs of maize deterioration.

Chicago soyabeans declined last week as a bearish WASDE release projected a decrease in US exports and increased stocks amid continued trade tensions. Paris rapeseed futures also declined mid-week but recovered some of the loses by Friday’s close as continued worries around European production lent support to prices.

The Association of German Farm Cooperatives cut its estimate for the German rapeseed crop last week.

The Association cut its winter rapeseed production estimates to 3.55Mt, a 0.50Mt reduction from June. This reduction in rapeseed production, if realised, would be a 16.8% decrease from 2017 levels.

The French government is now estimating the 2018/19 winter rapeseed production at 4.6Mt, a 0.3Mt reduction from its June forecast. Output is now down 15% from 2017, which is attributed to the impacts of frosts, the wet spring and increased flea beetle pressure.