The Grain Column with Emma Croft

Emma Croft, farm trader at Anderson Grain Marketing Ltd.
Emma Croft, farm trader at Anderson Grain Marketing Ltd.

Although volatile, both old and new crop feed wheat values are unchanged this week. Feed wheat for spot collection continues to be valued in the region of £150/T ex-farm whilst movement further forward into the summer months is offering up to £160/T ex-farm.

As for new crop values, the pound has marginally strengthened against the Euro this week, limiting any weather induced market rally. Feed wheat for November collection is currently offered at £140/T ex-farm.

According to AHDB, dry conditions have been building across the US Plains over the last few weeks; “a lack of rain in early March combined with unseasonably warm temperatures has caused a significant decline in moisture – we have even seen some cases of wildfire across the central plains in the last week”.

US wheat crops are expected to emerge from winter dormancy over the coming weeks, hence the current concerns. Local forecasts suggest that ‘light rainfall’ should arrive later this week but it is believed that significant rainfall will be required to improve conditions. Looking ahead, long-term forecasts are generally dry, adding pressure to current concerns. But how concerned should we be?

As with all ‘weather driven markets’, the coming few weeks will be both vitally important yet highly unpredictable.

The US plains are a key producer of wheat and an ideal start to the spring months would definitely give the crop a boost.

However, with world wheat ending stocks at a record high, there will be a limit to how far the market could potentially rally.

Regardless, the Chicago wheat future stabilised last week in reaction to the above.

Elsewhere, UK OSR values have continued to decline over the last week or so with current values now trading in the region of £350/T ex-farm for spot collection. Crush margins are poor and the French market is extremely competitive, limiting any price movements.

As for new crop values, £310/T ex-farm currently looks like a realistic offer for as available collection and many sellers appear reluctant to commit just yet.

Also, it is interesting to note that according to the latest data from HMR&C, UK OSR imports for the season so far (July-January) stand at 61,500 Tonne – this is a 27% increase on the volume imported over the same period last season. 18,000 Tonne of OSR arrived into the country in January alone, the majority of which was from France.

Rumours would suggest that a similar figure was imported in February with the addition of Australian supplies but this is yet to be confirmed.

If realised, we could see further pressure on the OSR market moving forward – any old crop left in store will have to effectively compete with this foreign alternative.