16 July 2019
(Week ending 12 July):
- Feed Barley, imported to Belfast (spot) at £156.00/t, down £2.00/t.
- Feed Wheat, imported to Belfast (spot) at £172.00/t, down £1.00/t.
Wheat (neutral) - Russian and European production forecasts have been revised down, reducing the forecast global surplus.
However, production is still forecast at record levels. US maize will continue to influence market direction.
Barley (neutral) - Harvest is underway in Europe and the UK. The market looks well supplied, but awaits further yield information. At £134.50/t (FoB, Harvest), UK feed barley is currently export competitive.
- The US is forecast to be drier and hotter than normal leading to a more bullish, US centric, feel to markets in the short-term.
- Chicago maize futures have gained due to the hot and dry adverse weather forecasts. However, the rise could be limited by increased South American maize availability competing for export sales.
- In the latest USDA supply and demand estimates (WASDE), global wheat production for 2019/20 was reduced by 9.4Mt.
Russian wheat production was lowered by 3.8Mt to 74.2Mt. Also, after the brief heatwave across Europe, production for the region is forecast at 151.3Mt, down 2.5Mt month-on-month.
The #AHDBCropTour is now coming to an end. UK cereal crops are in general looking good. However, disease pressure has led to varied yield expectations.
With a larger wheat crop expected, exports will be more important this season. At £143.50/t FoB on 16 July, UK feed wheat is pricing above that of Black Sea origins. Prices may face further pressure, depending upon the size of the harvest.
The barley harvest is underway and export prices are competitive. However, Brexit uncertainty will mean that UK feed barley needs to remain price competitive.
(Week ending 12 July)
• Oilseed Rape, delivered to Erith (Hvst-19) is up £6.00/t, at £328.00/t.
• Rapemeal (34%), ex-mill Erith (July-19) is up £3.00/t, at £183.00/t.
Rapeseed (neutral - bullish) - The picture for EU rapeseed continues to tighten. Reports of low yields and poor oil content in France has pushed prices higher. Furthermore, yields are below last year in Ukraine.
- Rapeseed prices (UK physical and EU futures) firmed last week. EU production forecasts continue to reduce. Oilworld estimate that EU rapeseed production could be as low as 17.5Mt (www.Oilworld.biz).
This reduced outlook increases the need for EU prices to be at import parity.
- French rapeseed yields are being reported at 2.5t/ha to 3t/ha, down on the five year average of 3.2t/ha. The Ukrainian harvest is now 50% complete, yields are forecast at 2.2t/ha, compared with 2.4t/ha last season.
Ukrainian rapeseed production is still expected to reach record levels this season. It will be needed to support European shortfalls.
- Soyabean markets firmed with the US area planted to soyabeans down year-on-year. The combination of reduced area and concern over above average temperatures pushed prices higher.