4 June 2019
(Week ending 31 May):
- Feed Barley, delivered to Belfast (spot) up £11.50/t, at £170.00/t
- Feed Barley, imported to Belfast (spot) up £9.00/t, at £165.00/t
- Feed Wheat, imported to Belfast (spot) up £2.00/t, at £181.00/t
- Bullish - Global grain markets have continued to follow a bullish trend as rains persisted in the US. The further weakening of sterling also added some support to UK prices.
Bullish - Global New Crop wheat futures have continued to follow the trend of corn, on the back of delays in maize planting. The rain also seems to be posing a risk to winter wheat conditions with 61% of wheat rated as good-excellent compared to 66% the previous week. Although not dramatic currently, this could be a sign of things to come.
Bearish – Conditions of US winter wheat may be deteriorating but globally wheat forecasts are on the up. The latest grain market report from the IGC has revised global wheat production up 4Mt from the last forecast at the end of April.
Bullish - Similarly to corn, Managed Money funds have been lessening their short position on Chicago wheat futures adding support to the futures market. New Crop wheat futures have continued to find support from delays to US maize planting.
The gap between Old and New Crop wheat prices has continued to lessen; just £3.50/t discount into New Crop. Due to this, UK old crop prices are finding further support from the bullish New Crop futures markets.
The outlook for New Crop cereals in GB is still relatively good according to the ADAS Crop Report released last week, with majority of cereal crops in good-excellent condition. There has been low weed, disease and pest pressures across GB. However, a lack of water availability is starting to stress some crops.
Sterling has weakened further, with the value of the pound at its lowest against the euro since mid-January and its lowest against the US dollar since early-January. This has added further support to the domestic markets.
(Week ending 31 May)
• Oilseed Rape, delivered to Erith (Jun-19) up £4.00/t, at £325.50/t
• Rapemeal (34%), ex-mill Erith (June-19) up £9.00/t, at £191.00/t
Once again the oilseed market is largely dominated by the weather and currency. UK rapeseed delivered into Erith (June 2019) was quoted at £325.50/t, up £4.00/t on the week as sterling ended the week at £1= €1.1304, a more than 4 month low.
Rapeseed - Temporarily Bullish
Rapeseed prices have firmed on the bullish soyabean news. This move higher has been further compounded by forecasts of reduced rapeseed production in the EU.
Last week Strategie Grains reduced their forecast of oilseed rape production by 1.1Mt, to 17.8Mt. If realised the forecast would represent the lowest production since 2006/07.
While the production forecast may be tight in the EU, and the outlook may be challenging for the US, rapeseed crops in the Black Sea region continue to look largely favourable. Furthermore, global rapeseed stocks are set to remain large in 2018/19.
Last week we released our latest update on UK crop conditions. The report suggests that 10% of the winter oilseed rape crop was lost over winter.
For the crops that did make it through winter, 19% is considered to be in poor or very poor condition. It is expected that yields of UK oilseed rape could be down by 20-40% on farm averages.