The latest planting survey from the US Department of Agriculture was released last week and the results caught the market by surprise.
According to the report, US farmers intend to expand the area planted to soybeans for the upcoming 2017 harvest by a staggering 2.4 million hectares – a 7% increase on the previous year and an amount which is far larger than trade expectations.
As a result, the Chicago soybean futures are currently valued around $7 lower than Friday’s position.
The UK market is however unchanged on both old and new crop positions which is surprising but beneficial to sellers – old crop is currently valued in the region of £335/T ex-farm while new crop is floating around the £300/T ex-farm mark.
Plantings of US wheat also look set to fall by an estimated 8% from the previous year to an estimated 18.6 million hectares.
Closer to home, spring drilling is now well underway with many farmers now nearing completion. Conditions have been ideal with mild seed beds, warmer days and plentiful showers.
As for winter crops, yield prospects at this stage in the season are extremely promising and we have heard of very few weed, pest or disease issues to report of.
For those of you looking for extra seed, there are certain varieties of both barley and wheat available for immediate delivery – again, please contact the office to discuss your requirements.
Feed wheat for spot collection has continued to trade in the region of £150/T - £152/T ex-farm this week as buyer demand turns quiet. As for new crop values, prices are again unchanged this week with November collection offered at £136/T - £138/T ex-farm.
Although volatile, the value of the pound against the euro has strengthened by almost 3% over the last few working days – it is therefore surprising that the value of new crop wheat has maintained its position this week.
Seller interest in the new crop market appears to have stalled this week and whilst many are simply pre-occupied with land work, there are wider concerns that UK farmers are becoming complacent with current values.
UK values have risen this season due to a tighter domestic supply situation alongside a weaker pound.
However, it is extremely important to remember that the UK market is currently in a very unique position.
Looking ahead, the UK’s relationship to global prices next season will depend on the size and quality of the UK crop and various other external factors. Unless we see a tight domestic situation again next season, UK prices will have to become more competitively priced in order to compete globally; we are already seeing the new crop wheat futures align more closely with global markets.