FEED WHEAT
Old crop remains a volatile affair with Chicago futures moving dramatically on a daily basis. The world wheat situation is tight, the question is how tight? All the focus is now switching to new crop and crop conditions around the world. Whilst it is apparent that the world cannot afford another crop problem it is also clear that wheat plantings have risen around the world and that, if crops deliver, we are going to see a significant rebuilding of wheat stocks.
EU and UK new crop prices reflect this uncertainty. They reflect a level which is historically highly attractive for farmers but a significant discount to the 07/08 crop year. This gap of £40+ will be closed at some time and it will be crop development that determines whether old crop falls to new crop levels or new crop rises to meet old crop.
To the end of October the UK has exported 676,615 mt of wheat and imported 503,069 mt. This compares with last season – exports 644,393 mt and imports 350,113 mt. As expected, maize imports have risen dramatically with 594,446 mt being imported to the end of October. This is 225,000 mt more than last season.
Our export programme continues with six ships in three different ports being loaded in December, including the MV Arklow Raider pictured here at our Immingham facility loading 4,166mt of feed wheat destined for Ireland.
With UK wheat being uncompetitive for export, fresh business is virtually impossible but our export programme will continue well into 2008 as we execute old contracts.
OILSEED RAPE
Seed prices continue to firm on strong consumer demand in the spot months. With seed slow coming forward traders hedging sales are forced to the futures market to take cover. Concerns over soya bean acreage in the US for the coming season is also adding to the sentiment, along with the weaker UK£ versus € exchange rate.
With the current MAY futures position at a 'discount' to the FEB, this indicates the scramble to cover sales in the nearby positions, with buyers and crushers alike not chasing the deferred positions.
MALTING BARLEY
Fusarium, high nitrogen and germination problems throughout the EU are now causing everyone concern. The UK has germination and infestation problems and we would again strongly advise anyone still sitting on unsold malting barley to look at selling and moving it as soon as possible. With premiums for malting barley over £50/T it makes sense to get your barley safely delivered and your money in the bank. The adverse conditions the crop has endured through the growing season seems to have affected germination and we are finding that even crops harvested before the main rains (ones that would be sound in a normal year) are still losing their germination. Make sure that you keep ventilating your stores throughout the festive period. Keeping stores cool is the number one priority as we move into the New Year.
