Agrifacts | November 2023 Your monthly roundup of news, prices and other farming matters
| Grain Market Report It has been a tale of positives followed by negatives recently in the wheat market, just when it seemed we were getting somewhere and getting to target numbers the market seems to drop again. The key number to watch at the moment is May 2024, which seems to give incentives to carry. The market at the moment is relying on forecasted yields in the US, but we need to remember that these are just forecasts. The other numbers that most were looking out for were the South American forecasts – many thought that because of the poor start that some of these crops have had, the forecasts would be lowered. Nope – they’re all exactly the same – for now. With most fund managers continuing to run an almost record short position, the market clearly gets nervous when it sees headlines like ‘Ukraine says Russian missile hits civilian vessel in Black Sea’. From here, how big would the leap be to hit a moving grain vessel? The market in recent weeks has become very relaxed about news like this but we saw some move’s up because of it. In the flat market we have operated in, the general feeling is that don’t want to miss little spikes when they appear. The analyst SovEcon also gave some good analysis on Russian’s own export numbers comparing this seasons potential export of 3.8-4.2 million metric tonnes to last years 4.3 million metric tonnes. They have also been commenting on a possible export quota (circa 24 million tonnes) which may be introduced from mid Feb through to the end of their old crop season. We will see if this story has legs. Back to the UK then, and after some excitement from a recent positive in the market it soon feels that we might be back to square 1. Some positives though, which we must remember – •
There are still some sensible shorts out there for specific grades.
•
There is still a good carry into Jan – Mar and Apr – June positions.
•
Premiums for both milling wheat and malting barley are at multi year highs
•
New crop numbers are trading at a healthy premium to old crop – which may be attractive for initial forward sales
Another positive is that the weather may have just taken a turn for the better. Hopefully we might get a few more consecutive dry days! In all seriousness it’s been a very tough spell. Most of us hope to be able to drill some more winter wheat before giving up for the spring completely. The market wants us to drill it too, but as I have commented in recent reports, taking some forward cover is going to depend very much on your own individual circumstances. Barley remains the poor relation to wheat – the spread between the two refusing to close up as merchants try to take advantage of any export opportunities that appear. Currently this remains jolly difficult. A quick word on rapeseed which had, during the week followed the soybean crop as Chicago tried its best to reach two month highs with their flash sales to China taking place. The USDA numbers have extinguished some of this enthusiasm though – we may have to play a waiting game a little longer yet. Alice Kilham Openfield