September Arable Update

The global grain markets are relatively quiet, it’s more or less the same story as last month; there is lots of grain around the world, global grain markets are as low as they have been for ten years and the main thing insulating us from the same treatment is the decline of Sterling.  Changes in weather have helped wheat and oils to lift up over the last few days, but not into new trading territory; when there’s crop to be drilled or harvested, weather reports often affect traders more than the weather actually affects the crops.  In the Northern Hemisphere (where 80% of grains are grown), the small grain harvest (wheat etc.) is being completed in the Northern countries like Canada, and the larger grains’ harvest (maize) is just starting in the more southern regions such as the Mediterranean.

Egypt, the world’s number one wheat importer, announced earlier this year that it was to have a zero tolerance policy on ergot in imported wheat. That led to import tenders which no country bid for. In the last month, a tender was cancelled following the participation of only one bidder. This led to the Egyptian’s cancelling their policy and returning to internationally agreed standards of 0.05% inclusion. Imports have restarted.  

Feed barley is trading at about 10% below feed wheat, in other words within its normal trading band.  However, it is currently overpriced for exports and little is expected.  A spring malting premium though is still commanding almost £30 per tonne over the feed default.  With large amounts of malting barley in the UK, this seems a little surprising.  It puts good malting barley specifications at a higher price than full specification milling wheat in most parts of the country.

Pulse quality is reportedly good this year, with some vessels already sold to the likes of Egypt.  Some have bruchid beetle, but less than previous years.

The oil content of oilseed rape is apparently considerably lower than last year, with average oil levels at nearer to 42% rather than last year’s 44%.  The price of oilseed rape is comparatively high compared with wheat and values have continued to pull away from other grain prices over the course of the month for nearby sales.  However, there is no price carry and is flat from now until next harvest where it falls for 2017.

Planting is reportedly slow this autumn, seed sales behind this time last year and so many are starting to suggest wheat area will actually be a little lower than last.  Yet many farmers are also delaying their drilling to allow a flush of resistant grass weeds before planting.  Whether these growers will end up drilling winter wheat in late October and November or wait until the spring to put barley in will probably depend on the weather conditions over the coming weeks.  For those who are looking at 2017 grain prices, where there are prices available, the cereals prices are similar for 2017 harvest as for October sale for old crop.