At last, a degree of volatility has been injected into global grain markets (albeit short-lived). The early part of the month saw dry weather in the US push Chicago May’18 futures above $5 a bushel, with UK new crop values following suit, peaking at £148-£150/t ex farm for November’18. Values have subsequently receded back to £145-£146/t but the last four weeks have shown how nervous global grain markets are towards a weather issue that may affect prices, and this is before we head into summer.
Old crop values have also had a minor renaissance over the last month; the ambition of end-users to buy hand-to-mouth coupled with the intended reopening of the Vivergo bio-ethanol plant at Hull has seen spot wheat increase by over £5/t to £151-£153/t depending on area. With spring still yet to ‘spring’, harvest seems a long way off and so old crop demand looks unlikely to dip. At this stage it’s very much a ‘six of one, half a dozen of another’ scenario, however with the recent strengthening of the pound, European wheat imports are virtually at parity with domestic values.
Barley continues its upward trajectory, peaking at £142-£144/t for March, depending on location. A limited supply of feed barley has ensured that values keep rising and it is certainly hard to see them dropping at all in the short term. New crop barley is much harder to value; there is very little liquidity further forward, and merchants will be reticent to take too much of a position having had their fingers burnt this year. A £10/t deduction to wheat would be a reasonable value to take and certainly anything over £15/t difference would be far too cheap.
Oilseed rape (OSR) continues to be a broken record; April levels remain at £290/t with very little carry further forward. It seems to still be a case of who is going to blink first between growers and end users and with a vast number of growers waiting for £300+/t. At this stage it would seem that unless the soya market takes a serious upturn, values are likely to remain stagnant.
Ammonium nitrate levels remain relatively flat but TSP values have increased recently, which has in turn sent compound values higher. With some fertiliser now starting to be applied on farm, prices a firming a little so it’s probably wise to look at any further requirements sooner rather than later.