DCSIMG

Grain report: Buyer interest for crop grain grows

Driffield

Driffield

Buyer interest for both old and new crop grain has been much better over the last week now that this month’s supply and demand estimates are finally out of the way.

Old crop feed wheat would currently make £152-154/T ex-farm for March collection whilst April/May movement would offer £155/T ex-farm. For those of you looking for £160/T ex-farm, some late July collection may be negotiated at this stage.

Whilst buyer interest is undeniably better, European maize corn imports are proving tough competition; particularly given the current strength of the Pound against the Euro (importing maize becomes cheaper as the pound gets stronger).

As for feed barley, old crop values have come under pressure this week as the UK crop struggles to compete with foreign competition.

According to HMR&C, in December 2013 the UK exported 136,000/T of barley bringing the season to date total (July-December 2013) to a huge 772,000/T.

While considerably above 2012 levels, the pace of exports is beginning to slow – the 136,000/T exported in December is small compared to the 202,000/T exported in October and the 178,000/T exported in November.

Meanwhile, new crop feed wheat values have shown some slight signs of improvement this week although this should probably be attributed to an increase in buyer interest rather than any changes to the physical fundamentals.

Feed wheat for September collection is currently trading in the region of £140/T ex-farm whist movement for January 2015 would make £145/T ex-farm. Feed barley has maintained its £12-15/T discount to feed wheat.

Crop conditions have continued to look favourable here in the North-East and although the weather has obviously been far from ideal in the South-West, it is so far doing little to raise long term supply concerns for domestic end-users.

Further afield, wider Europe is continuing to show encouraging signs of good production, particularly in France where issues of cold temperatures earlier this year were initially seen as a cause for concern. 75% of the total French wheat crop (of 23M/Ha) is estimated to be in a ‘good/very good’ condition. If realised, this could produce a total wheat crop of more than 138M/T – 3M/T higher than the year previous.

Elsewhere, old crop OSR values have rallied to £302-303/T ex-farm for spot collection this week whilst new crop values remain unchanged in the region of £270-275/T ex-farm for as available collection.

China has cancelled a further 272,000/T purchase from the US this week in light of the ‘on-going GM debate’, adding further pressure to an already ‘logistically struggling’ Canada and Australia.

Australia has however confirmed this week that supplies for the 2013-14 season should total 3.55M/T, the second largest crop on record which could add some pressure to values in the long term.

By Emma Croft

Anderson Grain Marketing

 

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