April Arable Outlook

Old Crop

The UK farmer has been selling large amounts of grain this month, possibly starting to clear full stores in preparation for the forthcoming crop. Prices have picked up a pound or two based on good export sales throughout Europe and the UK, clearing a proportion of the very large stockpile of grains throughout the regions. Barley prices have remained subdued, especially the malting premium values, as consumers content themselves with the large tonnages still available through to harvest. This time of year is normal for barns to be emptied, not only as stores need preparing, but markets slow down too; bean exports decline and are replaced by Antipodean crops, oat business dries up and animal feed business slows as outdoor animals usually have more grass to eat, albeit slow to grow this year.

New Crop

The rain is currently lashing against the window of the office where I sit. The heaters are on and staff are cold. A radio presenter this morning suggested spring was over and making way for autumn. The spring drilling conditions have not been good, several farmers have reduced their drilling plans, leaving considerably more land fallow than was initially intended. Our fallow land projections within our crop area forecasting service have been increasing, but could still be too low potentially, especially in Scotland, where informants have suggested spring barley drilling is still only 65 percent completed. In England, drilling is probably 95 percent finished but some are resigned to the fact that drilling is over for them, especially those on heavier land who risked spring cropping to tackle grass weed infestations. For some, it did not pay off this year. Yet, barley drilled after mid-April has traditionally been referred to as ‘Cuckoo-corn’, something we may see plenty of this year, presumably returning low average yields. Late drilled and badly established spring crops will now require a gradual warming and drying; if conditions suddenly turn hot, the young crops with tiny roots could suffer badly. Spring oat plantings have been taking place, compensating for the low winter oat area, and beans have mostly been successfully drilled, with only a few growers resigned to undrilled areas. Seed certifications suggest the bean area will be similar to last year overall, despite earlier projections of another area rise.

Globally, the grain market has been more positive, partly because of weather patterns elsewhere. The South American growing crops of maize and soybean (in Brazil and Argentina respectively) have been troubled by unsuitable conditions. This has rallied markets, particularly as China has been upping its purchases of soybeans once again. The latest forecasts by the USDA are that Chinese soybean imports in 2015/16 will be 83 million tonnes, 13 million tonnes more than only 2 years ago! This has picked the oilseed rape market up this month too with speculators buying long positions who see supply problems ahead if Brazilian growing conditions don’t improve.

On the bearish side, in the US, winter wheat is in good condition and spring (maize) plantings are ahead of schedule. In the EU, the story is relatively similar, the wheat area is apparently high, especially in France but the likes of Poland are reporting lower crop areas.

Next month will herald the first USDA forecasts of the forthcoming crops, a turn of attention to new-crop and the major market and a noticeable slowing of old crop business. This can be a volatile time of the year especially when drilling conditions are still dicey.