AgriFacts September 2018 Your monthly roundup of news, prices and other farming matters
Market Commentary It has certainly been a volatile few months since I last gave my five pence worth in this publication back at the end of May. A combination of drought conditions in Australia, much of NW Europe, the UK and Scandanavia plus a drop in the size of the Russian wheat harvest combined to push Matif and London wheat futures markets to levels not seen since 2013. £200 per tonne for UK feed wheat was briefly available in some regions for the end of this marketing year before markets fell back some £20 from the top. Since then markets have recovered some poise as rumours of Russia limiting export volumes have resurfaced. To add to the confusion we have President Trump’s ongoing trade dispute with China which has impacted the Soy sector whilst US Soy and Corn crop prospects look excellent, with large crops expected at the time of writing. In addition Brexit looms ever larger on the horizon and the rules for importing and exporting agricultural commodities are far from clear, despite assurances from the UK Government that we will all be informed and prepared in good time before the end of March 2019. In stark contrast it is fair to say that the agricultural sector, seemingly along with most other sectors, is not ready for Brexit and we are already at the point where traders are not able to clarify what levy, tariff, phytosanitary, labelling or country of origin regulations will or won’t be applicable to business transacted for delivery from April 1st 2019 onwards. To say this situation is farcical is not an understatement. The UK harvest is nearly complete at the time of writing and I think it would be fair to say that the outcome, whilst not good for many, was better than was expected after the very hot, dry weather we experienced. Winter barley generally seems to have yielded well whilst spring barley yields and quality varied wildly, depending on soil type, on when the crop was planted and whether crops caught a shower or two. Oilseed rape yielded
below par and the UK rapeseed market will need to be priced at a level that attracts imports. Wheat yields also varied hugely with the Eastern seaboard, the Wolds and chalky soils in Hampshire and the central South faring best. Nevertheless it is expected that the UK crop will fall below 14 mln mt and how far below is a matter of some debate. This means we will again be a net importer and not just of wheat. Large scale maize and other non-grain feed ingredients have been shipped to date and this is ongoing even if the volumes are reducing as UK wheat became more competitively priced. The UK bioethanol sector has experienced tough trading conditions as the price rise in wheat has far outpaced the relative price of ethanol and one of the two plants is expected to close for a period of ‘maintenance’ imminently. This will impact on the demand side of the UK wheat balance sheet. Where prices go from here is open to debate. Prices are good for farmers but they are where they are for solid reasons. The world wheat supply and demand situation is set to tighten this year and world Corn stocks, despite the expectation of big US yields, will also reduce and demand is increasing too. In Europe the wheat balance sheet is finely balanced and this should support prices for the medium term. One final point – the cure for high prices is high prices. Historically farmers around the world have shown a remarkably rapid ability to react to high prices by planting more. There is no reason to believe that this won’t happen again and therefore crop 2019 prices are well worth close examination. David Sheppard Managing Director Gleadell Agriculture Limited
Month (ex farm) Midlands
Feed Wheat
Feed Barley
Oilseed Rape
Currency
Sept 2018
£172.00/t
£165.00/t
£322.00/t
£/€ =1.1111
Oct 2018
£173.00/t
£166.00/t
£325.00/t
€/£ = 0.8976
Nov 2018
£174.00/t
£167.00/t
£326.00/t
$/£ = 0.7760
Milk Data
Avg Monthly Price
UK Farmgate Milk Price
28.56 ppl
Fuel/Straw/Silage
Price
Fertiliser
Price
Red Diesel
63.66p/litre
34% N AN (bags UK) £/tonne
£271.00
Big sq Baled Wheat Straw
£65.00tonne
0:24:24 blend (bags) £/tonne
£281.00
Big Bale Hay
£75.00/tonne
20:10:10 blend (bags) £tonne
£268.00
p/kg dwt
Finished Steers
Finished Lambs
Finished Pigs
367.40
424.80
145.60