February 2018 Update

Another quiet month has seen little to no change in the value of feed wheat in the North East; good demand from Ensus continues to maintain prices at £145-147/t (depending on location) and with very little carry further forward it seems unlikely that there will be much movement in either direction over the coming months.

New crop is certainly a far more interesting prospect: the condition of the UK wheat crop, whilst not being a disaster, does not give you the impression that a record harvest is in the offing. Provided that the bio-ethanol industry in the North East continues to fuel domestic demand and the currency remains stable, new crop wheat values will be well supported at £145-147 for Nov’18.

The on-going Brexit negotiations remain the biggest unknown. With the UK’s formal departure due to begin in a year’s time the consequences for trading tariffs, bio-fuel policy and trading relationships with the rest of the world will undoubtedly affect domestic grain prices and it is very difficult to decide in which direction!

Worldwide, as we head towards spring we will start to get a better idea of the condition of emerging winter crops and intended spring plantings. The world as a whole has been blessed with consecutive record wheat and corn crops in Russia for the last few years, suppressing world values. It is only a matter of time before a weather issue develops in Russia or one of the other major cereal-producing countries which would send markets sharply higher. That being said, it is prudent not to pay too much attention to every weather report you see; winter in Russia is usually cold and summer in the mid-west of America is usually hot.

Oilseed Rape (OSR) continues to trade in the low £290s with growers all seeming holding out for £300/t. Whether or not growers would actually sell at £300/t were it to reach that is up for debate however, if you’re not in it for the long-haul, I would strongly consider selling in the mid £290s if you can achieve it rather than wait indefinitely for a 1.5% rise in price.

Feed barley continues to close in on wheat with March barley valued at £135 ex farm and seemingly unlikely to fall back any time soon. This is largely down to a lack of on-farm stocks combined with a weaker pound triggering export demand out of the UK.

Nitrogen markets have been fairly static over the last four weeks with imported lithan and polish AN £235 and £232 respectively, significantly cheaper than UK product at £243 for ‘spring’ delivery.

UK ‘Double top’ has almost sold out for spring delivery however there are still plenty of alternative nitrogen-sulphur compounds available for between £240-250/t depending on the specific product.

Inclement weather over the last month has ensured drills have remained in sheds and growers waiting on a decent break in the weather in March to commence spring drilling. GrainCo still have a small stock of both spring malting and feed barley seed available for immediate delivery should there be a break in the weather.