Old crop feed wheat has marginally retreated this week as the benchmark £150/T ex-farm slips away from the spot position.
Current values for collection in March are now trading in the region of £147/T - £148/T ex-farm. Further forward, May collection should secure £150/T ex-farm.
As another week passes, the value of the pound is generally unchanged against the week previous, along with the London LIFFE wheat futures.
With Vivergo now fully operational (apparently), end user demand appears to have slowed down – in reality, Yorkshire is perhaps now playing catch up with the rest of the country.
Local farmers have received a substantial premium due to good end- user demand over the last few weeks; maybe this premium is beginning to decrease?
As the first signs that spring is on its way begin to show, market attention is becoming increasingly drawn towards Harvest 2017.
So far, no major winter crop concerns have been identified in Europe by the EU’s Crop Monitoring Unit, despite less than ideal weather conditions in some areas.
The unit commented that “lower than normal rainfall since the beginning of the year has reduced soil moisture reserves in large parts of Germany, Sweden and the Czech Republic. However, these conditions do not present an immediate concern for crops”. Frost damage is also reported to remain limited despite a persistent cold spell throughout January in central and Eastern Europe.
Although early days, the news remains supportive of a good harvest next season. Forecasts will however evolve as conditions change and new information comes forward – this will be one to watch.
Meanwhile, according to AHDB, in under a week Egypt has purchased 720,000/T of soft wheat in tenders, boosting the pace of sales ahead of this time last year.
In the latest tender, Egypt agreed to purchase a further 360,000 Tonnes of wheat from Russia and the Ukraine having already committed to a substantial order from Russia the week previous.
This latest tender has taken the cumulative tonnage of soft wheat bought by Egypt to 4.6 million tonnes for the season so far. By this stage in the season last year, Egypt had bought 3.25 million tonnes of soft wheat.
It is also interesting to note that according to the HGCA, the price paid by Egypt for the most recent purchases has increased as Russian export values increase in accordance with a lift in the value of the Rouble. French exports were apparently offered, but appeared uncompetitive alongside various
Black Sea offers. Regardless, the substantial interest in wheat imports generally has been a supportive price factor for the European grain market this week.