Old crop feed wheat values are once again unchanged this week as the market continues to lack in direction.
Feed wheat for spot collection is currently valued in the region of £150/T ex-farm and buyer interest is very good.
Further forward, ex-farm values are only offering a couple of pound per tonne more for movement into the early summer months.
Looking ahead, new crop values are also unchanged as the new crop wheat futures trade sideways.
Buyer interest is poor; with the pound fluctuating against various other major currencies and an uncertain six months ahead, buyers understandably appear reluctant to over commit in such a volatile market place.
Last week’s USDA didn’t provide the market with any surprises; global wheat production was reduced alongside a reduction to ending stocks but both remain at record levels.
As for the maize corn figures, there is very little change to report.
The report also made little change to South American production despite the markets persistent focus on any potential weather issues that may or may not have emerged over the last month or so.
It did report some minor adjustments to oilseed production figures but it revealed nothing that the market didn’t already suspect.
Speaking of oilseeds, it has this week been confirmed that China imported 7.7 million tonnes of soybeans in January – this is the highest monthly import figure for soybeans since 2006.
Furthermore, this level of demand is expected to continue for the coming months as good crush margins drive product demand. This could be good news for those of you who still have old crop OSR left in the shed.
Meanwhile, AHDB have this wheat reported that wheat used in the GB milling and bio-ethanol industry over the first six months of the current trading season (July-December) totalled 3.65 million tonnes, a 10% increase on the same period last year.
Amongst all the current (and rather confusing) political and economic market drivers, these figures give us a fairly logical explanation for the recent price rise.
If this level of demand persists, could we see a further increase to UK values?
Logic would suggest that if this pace of use persists, we could see the UK supply and demand situation tighten further.
However, UK wheat prices have already risen amongst the highest in the world.
To see any further increases to ex-farm values we would need to see world prices to rise also – we would need to see some much bigger at play that isn’t UK specific.