The Grain Column with Emma Croft

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

Global wheat markets edged higher last week, driven by growing concerns for US wheat production this season.

Last Friday brought two reports from the US Department of Agriculture which revealed information regarding both the carryover stock figures from the last trading season and the amount of acres in the ground which will comprise this season’s production total.

Both reports are currently available to view via our website but to summarise; the reports were not quite what the trade was expecting.

Looking firstly at the carryover stock, the figures seem pretty substantial compared to the carryover stocks this time last year, but they were in fact slightly smaller than what the trade was initially expecting.

With regard to the acreage report, there were a few surprises here too.

The area planted to all wheat is estimated to be the smallest area on record since records began almost 100 years ago in 1919.

It is also worth noting that given the amount of winter wheat in the ground stands at 32 million acres, a 9% reduction on the year previous, an increase to spring wheat production was forecast.

However, the amount of spring wheat planted has been estimated at 10.9 million acres – a 6% reduction on last year. Furthermore, the hot and dry conditions experienced across the US Plains over the past month look set to continue for at least another week.

With this in mind, it is not difficult to see why the Grain Market has rallied so sharply over the last few days; smaller than expected carryover stocks, a record low acreage in the ground and less than ideal weather is the perfect combination for persuading the market upwards.

As a result, new crop feed wheat for collection at harvest is currently valued in the region of £145/T ex-farm whilst collection before the end of the year is offered for most at £150/T ex-farm.

With this week’s 4th July celebrations disrupting the American market, UK new crop wheat values could go either way next week.

For those of you who are yet to make a start on marketing next year’s crop, now could be the time to start.

OSR values have also firmed over this last week and £300/T ex-farm is once again offered for harvest collection.

European supplies may be tight this season, but both US and South American supplies probably won’t be.

Also, according to the latest data from Canada, OSR sowings have outstripped the acreage sown to wheat for the first time on record this year.

Questions remain with regard to crop quality, but this could cap any short term price movements.