September Arable Update

The grain market is heavy and bearish.  The International Grains Council (IGC) is expecting the global 2015 harvest to result in 727 million tonnes of wheat, 8 million tonnes more than forecast demand and 7 million more than last year. Stocks at 71 million tonnes are thought higher than several years, and, when combined with other combinable grains, their stock level as a percentage of consumption is now higher than it has been since 2001 (apart from 2007 which matched this year’s figure). The UK wheat crop, is harvested and added to a stockpile of 2.4 million tonnes. Yields as we know are good and the area is about average so the overall crop is greater than average. The proportion of milling wheat grown this year was about 8 per cent more than previous years. It is little surprise the milling premium has all-but disappeared this autumn already.

 Barley also appears plentiful throughout Europe and some are pointing out the slowdown in the Chinese economy is likely to slow their beer consumption, inevitably having in implication on our malt market too. Domestic feed compounders are not demonstrating any hurry to take cover for the winter so prices remain dull despite a few small coasters heading for the Spanish processors.

 It is too early to judge what the global maize crop is likely to yield (across the EU or the US Midwest) but it would take a real shock for the world not to have ample this year. Even if the El Nino, that has been commentated on regarding shriveling the Australian crop is now leaving it too late to make much impact, even in the Antipodes.

 The oilseed market is currently dull, with expectations of a sufficient harvest of oils this year. Soybeans (that account for about two thirds of all oils) are thought (by the IGC) to be a smaller crop than last year (317 instead of 322 million tonnes), but considering the previous record crop was the year before and was only 285 million, that’s clearly still plenty. It remains 2 million tonnes more than demand is thought to be, and by the way, it also depends who you ask because the USDA is still betting on another record crop. In other words, let’s not get too excited about a huge rally in OSR prices this season.

 The pulse harvest nears its conclusion with a crop possibly 25 percent bigger than last year. The human consumption specification beans with storage will find a home with a premium, but it might take a while before the markets start buying in good tonnage. Currently,Egyptians are relatively quiet, but it will be sensible to have the majority sold by the New Year so the Australian crop does not interfere with ours.