29 May 2019
The report is a review of the week ending Friday 24 May. Yesterday (28 May), New Crop futures (Nov/Dec-19) jumped in value:
(At 28 May close, change since Friday 24 May)
- Chicago maize (Dec-19), $172.05/t, up $6.79/t
- Chicago wheat (Dec-19), $192.43/t, up $5.15/t
- Paris milling wheat (Dec-19), €187.75/t, up €6.25/t
- UK feed wheat (Nov-19), £155.50/t, up £3.75/t
- Chicago soyabeans (Nov-19), $324.23/t, up $9.64/t
- Paris rapeseed (Nov-19), €372.25/t, up €3.25/t
(Week ending 24 May):
- Feed Barley, delivered to Belfast (spot) down £1.50/t, at £158.50/t
- Feed Wheat, delivered to Belfast (spot) unchanged at £180.50/t
- Feed Barley, imported to Belfast (spot) up £2.00/t, at £156.00/t
- Feed Wheat, imported to Belfast (spot) up £1.00/t, at £179.00/t
- Bullish - Global grain markets continued to climb last week as the bullish grain market tone continued. Paris and UK new crop wheat futures were further supported by the climbing Chicago maize and wheat futures market as rain persists.
New Crop Wheat Temporary Bullish
New Crop wheat futures have continued to find support from delays to US maize planting. Additionally, as rain persists, there is a potential for winter wheat damage, however, the USDA are continuing to report crop conditions as 66% good to excellent.
A further reduction in the short position of Managed Money funds on Chicago wheat futures led to gains last week, and Paris and UK wheat futures followed suit.
UK New Crop feed wheat futures (Nov-19), having fallen to a contract low of £141.00/t on 13 May, continued to climb last week, up £4.50/t at £151.75/t on Friday. Further support for new crop UK feed wheat also came from a further weakening of the pound.
As markets are predominantly being driven by weather conditions in the US, how long this market rally continues will depend upon the next couple of weeks of planting progress and crop development. Yet as US funds finish exiting short positions, and the planted area is known, New Crop wheat prices may again drift as conditions in the EU, Ukraine and Russian remain favourable.
UK Old Crop
UK Old Crop prices have now found support from the recent bullish New Crop market. The discount into New Crop prices, has now narrowed to such an extent that Old Crop prices are now being supported.
Feed wheat for May delivery into Belfast has stabilised on last week, quoted at £180.50/t as at 24 May. This is following a continual downward trend from the beginning of April.
Feed barley, delivered into Belfast has fallen £1.50/t, at £158.50/t (24 May) despite some recovery week ending 17 May.
Now Old Crop and New Crop prices have converged, should the New Crop Bull Run continue, this could now offer upward support to Old Crop markets.
(Week ending 24 May)
• Oilseed Rape, delivered to Erith (Jun-19) is up £3.00/t, at £321.50/t
• Rapemeal (34%), ex-mill Erith (May-19) up £1.00/t, at £182.00/t
Neutral – Although New Crop (Nov-19) Chicago soyabean futures have moved up on the week, throughout the week prices have been fluctuating. Oilseed futures markets jumped considerably to yesterday’s close (28 May).
New Crop (Nov-19) Paris rapeseed futures have also increased on the week, but in a more gradual manner and are generally being driven by the soyabean prices. A further increase has also been seen this week.
Bullish - US soyabean planting is 37 percentage points behind the five year average causing some concern over final estimates. As a result, US funds are trying to exit record Short positions driving the price higher.
Bullish - Production prospects for EU oilseed rape have been further dropped by Oilworld to 17.7Mt (www.oilworld.biz), well below the EU commission forecast of 18.7Mt (down from 19.2Mt the previous month) and also below COCERAL’s estimate of 17.9Mt.
Bearish - There are still high stocks of soyabeans on the global oilseed market. US exports are down by 37% as at 16 May amid the unresolved trade dispute between US and China.