The Grain Column with Emma Croft

Emma Croft, farm trader at Anderson Grain Marketing Ltd.

Emma Croft, farm trader at Anderson Grain Marketing Ltd.

1
Have your say

Although the trading screen has edged lower over the last week or so, physical ex-farm values are unchanged.

As we edge closer to the end of the year, some farm sellers appear to be looking for that “Christmas Bonus” which we often see being offered at this time of year – that extra couple of pound per tonne given as both end-users and buyers alike panic buy to ensure that positions are well covered.

This year, the premium is there, it just isn’t as obvious as the markets have drifted a couple of pounds per tonne lower but the ex-farm bids are unchanged.

Feed wheat for spot collection this week and next are offered in the region of £137/T – £138/T ex-farm.

Further forward, buyer interest continues to be limited and ex-farm bids into the early summer months are only offering a couple of pounds per tonne.

£140/T ex-farm currently looks like a realistic value for May/June collection.

Catching the market’s attention this week is a government crop report from Australia which has pegged this season’s wheat crop at a record high of 32.6 million tonnes.

This is a 35% increase year on year and is a 16% increase from the previous forecast given in September. A record barley crop is also forecast at 10.6 million tonnes, a 24% increase on last season.

Rainfall throughout September was above average in the major growing regions and although this was initially a concern (hence the initial forecasts), it actually created good soil moisture during a critical development period despite the delays to harvesting.

But what does this mean for the global market? The HGCA have reminded that for the past ten years, Australia has on average exported around 70% of its wheat production. If a similar trend continues for 2016/17, this will mean that a large Australian wheat crop is likely to add pressure to an already globally saturated wheat market.

This will require some attention as we head into the New Year.

Closer to home, the first official 2016/17 UK cereals balance sheets for wheat, barley, maize and oats were published last week by DEFRA.

The report paints a much more finely balanced picture for wheat this season following two previous years of stock accumulation – lower availability alongside higher consumption has led to a tightening of the wheat balance sheet.

Total wheat availability is forecast at 18.9 million tonnes this season, a 7% decrease than the previous seasons balance sheet due to the smaller crop produced this year.

Going forward, if the area planted to wheat this year remains similar to that for Harvest 2016, yield growth will need to be much higher than we have witnessed to date to keep production in line with the recent advancement in demand.