18 June 2019
(Week ending 14 June):
Feed Barley, delivered to Belfast (spot) down £1.50/t, at £167.50/t
Feed Barley, imported to Belfast (spot) at £160.00/t
Feed Wheat, delivered to Belfast (spot) down £1.00/t, at £183.50/t
Feed Wheat, imported to Belfast (spot) at £177.00/t
Bullish to Mixed - In the US, continued rainfall and challenging planting conditions have led to a further rally in US maize futures, reaching a five year high. Additionally, further rainfall is expected and conditions are likely to remain cool with some thunderstorms forecast. However, European futures have resisted much of the continued US price rally. Beneficial weather across much of Europe and prospects for a larger cereal crop in 2019/20 have capped potential gains.
Should the price of crude oil spike following increasing tensions in the Middle East, further support could be provided for global agricultural commodities. This will be closely watched.
One to watch - Wheat production forecasts for Russia and Ukraine, the global wheat export price setters, have been revised upward to 108Mt in the latest WASDE. This would be the second highest on record, just 4Mt below the bumper 2017 season (USDA). However, there is a dry outlook for the spring wheat region which if sustained, could impact final yields.
Maize led Bullish – Managed Money fund positions have now pushed into a net long position amid fund buying to exit short positions. With US wheat futures following maize, the weather in the States will continue to impact global wheat markets
UK old crop markets continued to fall last week. Delivered feed wheat into East Anglia for July fell a further £2.00/t due to minimal old crop demand.
The discount between old crop (July) and new crop (Nov) delivered feed wheat has further narrowed to just £2.50/t. Unless there is a delay to harvest, old crop prices are likely to now follow the globally led new crop market.
(Week ending 14 June)
• Oilseed Rape, delivered to Erith (Jun-19) is unchanged at £323.00/t
• Rapemeal (34%), ex-mill Erith (June-19) is up £1.00/t, at £188.00/t
Oilseed markets moved higher last week due to concerns that continued rainfall may reduce the US soyabean area.
Bullish - With little fundamental change to EU and UK oilseed rape markets, the reversal in soyabean market sentiment and planting concerns has raised the floor for oilseed rape futures. New crop Paris rapeseed futures gained toward the end of last week as the price discount to soyabeans reduced. Delivered oilseed rape to Erith (Nov-19) was up £2.50/t week on week at £333.00/t.
Bearish - Much needed rainfall in Australia has improved the planting conditions and crop outlook. ABARES forecast the canola area to increase 6% to 2Mha and production to recover to 2.6Mt following the previous drought hit crop.