November 2017 Update
November is often a fairly stagnant month for grain markets with it being a popular position for farmers selling forward and with the Thanksgiving holiday in America effectively closing the market for the last quarter of the month.
The announcement that the Vivergo fuel plant would be ‘bringing forward’ a planned closure for maintenance did momentarily ease the feed wheat market however December’17 feed wheat continues to trade at between £145-148/t depending on location.
Given the distinct lack of supportive news, current old crop values look increasingly attractive. Over the last month, old crop is £2-3/t stronger whereas November’18 values have fallen on average £5/t. New crop follows the futures market directly, and has fallen under the pressure of heavy global grain stocks. Old crop on the other hand is very much driven by consumer-buying; growers at the moment do not seem in any desperate need to sell and so buyers are perpetually supporting the market to entice farmers into the market, that being said, wheat in the south is at an enormous discount to wheat in the north, and it is only a matter of time before it begins to move up here.
Oilseed Rape (OSR) took a rapid upturn in early November on the back of a resurgent French market, with values peaking at £325/t for spot movement. They have since fallen back to below £320/t for December, with a recent announcement that India are doubling the import tax on edible oils from 15% to 30% and a change in legislation surrounding imports of Argentinian bio-fuels weighing on the market. Values have settled more recently and with the inherent volatility in the OSR market a £5-10/t rally is never out of the question.
Feed barley seems to have found its upper limit at £128-130/t for forward positions depending on location. After harvest, barley did look a very attractive option for consumers with a differential to wheat of £20-25/t less. However, as barley has become increasingly in demand, that differential has closed and given the lower nutritional value of barley in comparison to wheat, it is hard to see the barley price increase relative to wheat, especially with the barley export market so weak.
Granular Urea values have fallen as expected and now trade at £278/t for Dec. UK AN is now priced at £244 for Dec delivery, significantly higher than last month and also making imported AN at £233 on the same terms much more attractive. MOP and TSP have both firmed in value £267/t and £293/t respectively. Given the current high cost of TSP, looking at utilising an ‘Advanced Phosphate’ like Avail would be quite advantageous. Avail uses a polymer coating to increase phosphate-availability and reduce nutrient lock-up in the soil, increasing plant root-mass and subsequent yield, or reducing the amount of fertiliser required per ha. GrainCo can offer Avail on all phosphate products at only £1/unit of P.
Given the inclement weather in autumn, are much greater area of spring-cropping is expected and subsequently popular spring varieties will be in short supply. For malting barley, new variety Laureate has so proven very popular, but with seed already very limited, concerto or planet would be a very suitable replacement for malting barley growers. Alternatively, Sienna spring barley has the highest spec. weight on the 17/18 recommended list and nearly 10% higher yield than concerto, make it a great option for anyone wanting to grow a spring feed barley.
To talk to one of our traders please ring 0191 4287700 for more info on GrainCo Ltd and the grain markets visit www.grainco.co.uk