MI Northern Ireland Market Report

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23 July 2019

Grains

(Week ending 19 July):

- Feed Barley, delivered to Belfast (spot) at £155.00/t.

- Feed Barley, imported to Belfast (spot) at £155.00/t, down £1.00/t.

- Feed Wheat, delivered to Belfast (spot) at £169.00/t.

- Feed Wheat, imported to Belfast (spot) at £167.00/t, down £5.00/t.

Wheat (neutral) - With harvest underway in the US and across Europe, markets have been sliding, while awaiting yield and production data. UK Nov-19 trading between £145.00/t - £150.00/t.

Barley (neutral) - With harvest well underway across Europe and the UK, markets are pricing at export competitive levels with vessels being loaded at multiple UK ports.

Global Markets

- US benchmark grain futures (wheat and maize) fell last week, setting a bearish tone to markets.

Managed money funds in Chicago wheat futures reduced their long positions, selling contracts.

- The advancing wheat harvest across the northern hemisphere added to the bearish outlook, with indications of good quality in the US. Further, cooler, favourable conditions in the US for maize and soyabean development are forecast to persist into August, improving the outlook for yield development.

- However, there are diverging trends, owing to the hot and dry weather, European maize futures have pushed higher, offering support to wheat markets. As such, although both European and UK wheat markets have fallen overall, the loss has been less than that of US futures.

UK Focus

- Meanwhile UK feed wheat futures (Nov-19) have been finding support at £145.00/t and a ceiling at £150.00/t and will likely continue to trade between these levels until further production data becomes available. The premium for bread wheat over that of feed has also contracted. However, weather will now be of greater importance for quality over the next month.

Oilseeds

(Week ending 19 July)

Oilseed Rape, delivered to Erith (Hvst-19) is up £2.00/t, at £330.00/t.

- Rapemeal (34%), ex-mill Erith (July-19) is up £3.00/t, at £186.00/t.

- Rapeseed (bullish) - The European rapeseed outlook remains tight. Ukrainian production forecast remains relatively high, despite yields and oil content being lower year-on-year. This will add pressure to availability for European imports.

- Although the EU are undoubtedly facing a tight supply the global complex is still relatively well supplied potentially placing a ceiling on increasing European rapeseed prices.

- Paris rapeseed futures (Nov-19) gained just €0.75/t week-on-week but UK oilseed rape saw a greater increase. OSR delivered into Erith in November gained £1.50/t on the week, resulting in a £27.50/t gain since 15 March.

- UK harvest area remains uncertain although an overall reduction in planted area is known. UK OSR harvests are underway recording yields 2.5t/ha to 4t/ha.

- If UK yields stay low, UK supply could be tighter than initially anticipated adding support to domestic prices. Further support to domestic prices comes from the weakening sterling.