October Arable Update

Within the last month the cereals market has made a big turnaround from the point where wheat was not even reaching £100 per tonne for spot delivery in some areas, to feed wheat back around £120 per tonne. The large crop this year played well into the buyers’ hands.  Some farmers struggled with storage and were forced to sell at the low prices, often not covering their costs of production.  Usually maize prices are below that of wheat; nutritionally maize is not as valuable as a feedstuff, but the past month even saw this change for a while in Europe.  The sudden shift in wheat price is perhaps a step too far for the market.

Volume has definitely not been a problem this season, however quality certainly has, those lucky few who have full specification wheat still to sell can achieve around £160 per tonne (significantly more money than they could achieve last month).  Both the UK and Europe is in demand for this type of wheat, exporting has been going well to the point that the UK may have to start importing again!  Barley has also seen an increase of almost £15 per tonne, more in line with its calculated value.  Malting quality producers have also gained in value with premiums rising to as much as £15 per tonne.

It is worth noting that the carry (the price increase whilst in store) from November to May is £8 per tonne, around £1.30 per month, much higher than the usual 50p.  It may be worth checking how much grain is sold making sure you are at least 50% and probably nearer to 65% sold and fixing a price now for May delivery.  But remember grain quality can deteriorate in store, make sure moisture content is right and then drop the temperature.

The much mentioned gap between cereals and break crop has shrunk back with the cereal price increasing and pulses holding firm.  With some predicting a rise of 30% in pulse area for next year (with new greening rules) and the possible impact it will have on the prices next autumn it may be worth booking a price earlier rather than later. Oilseed prices have also jumped, hitting a two month high, after a strengthening global market, however a large global crop is likely to subdue prices.

Further afield the return of drier weather in the US has meant the soybean harvest is progressing, the maize harvest is almost at the halfway point and looks to be a record crop. The dry weather has not been good for everyone, in Russia some crops are struggling to establish with some already predicting a 15% fall in the 2015 wheat harvest, the weakened currency has increased the prices of inputs and some farmers have chosen not to re-establish the crop.