July Arable Update

The barley and oilseed rape harvests have begun in parts of Southern England.  Clearly it is early days yet, but overall, reports have been disappointing.  Regarding barley, yields so far are poor, screenings very high and with low bushel weights.

The price quoted for feed barley is for a bushel weight of 63kg/hl and if this is not achieved, the penalties start to build up. As harvest progresses, it appears some of the better crops have been harvested and yields have been improving but it is important a vendor knows the specification they are selling.

Oilseed rape yields are also reported as very low in the few fields that have so far been cut.  Again, it is early days, but if this is a national pattern emerging, there is a high chance the area planted this autumn for next year could fall again fairly substantially.  Understandably, the low yield has been linked to the falling choice regarding agrochemical applications to prevent insect damage, although this will become clearer as harvest progresses.

These sorts of comments are reflective across the North Western parts of Europe, but in Central and southern Europe, harvesting conditions and yields have been better. Indeed, the USDA’s monthly update of global grain supply and demand saw some big changes this month, with production in the US going up 5 million tonnes (9%) and small increases in all the major exporters other than the EU.  Consumption is also seen rising as prices are relatively competitive at present encouraging greater feeding and processing.

On the 23^rd June (Referendum day), the UK wheat market was near to contract lows.  By the Monday morning the following week, it had shot up nearly £9.00 per tonne. It has settled back since then but this is entirely thanks to the sudden weakening of the Pound as is demonstrated by the chart below.  The November 2016 wheat price and Pound:Euro exchange rate are indexed from the spring and, as can be seen, have followed a similar trajectory. Globally, wheat prices have slipped in recent days, potentially in the light of the USDA projection, but also the newsfeeds of relatively good harvesting conditions in many parts of the world.