Commodities WORLD GRAIN AND FEED MARKET REVIEW
by Rebecca Sherratt, Production editor, Milling & Grain
As the weather improves and the worst of winter leaves us, harvests are proving especially bountiful.
The onset of spring
As winter begins to wane, pressure is relieving for farmers worldwide, especially US farmers. The Northern Hemisphere in the US remains especially favourable, as the warmer weather helps crops flourish. The same is also gradually taking pace in Europe and across the Black Sea, forecasting positive harvests as the weather improves.
Despite this, the current season stocks-to-use ratio of major wheat exporters is at its lowest since 2013-14, at 14.7 percent. Experts say that, in order to improve this statistic, a large level of production will be needed to return to normal stocks.
Brazil and the US
Brazilian soybean harvests for 2018/19 are now 36 percent complete, according to statistics by AgRural. Due to dry weather and higher temperatures than expected, the pace of soybean harvests has accelerated. Soybeans are currently 19 percent ahead of the harvest pace for 2017/18, so Brazilian soybeans will be on the market and available for export much sooner than one would expect, based on the average yearly harvest time. This does, however, mean that there is ample supply of soybeans for the current season, and so no shortages are expected to occur.
The US-China dispute does, of course, play a huge part in soybean stocks and markets, and the exports of soybeans continue to remain lower than 2017/18, and a cyclical trend of peaks and drops of exports can be seen between the US and Brazil.
Experts say that the trade dispute between the US and China will only cause minimal damage to the market, as over the past months the market has managed to recover and accommodate these changes. US stocks are now increasing, and those, in addition to the Brazilian stocks, are ensuring ample quality of soybeans.
UK markets lowered
The UK wheat markets closed at a much lower rate recently than in previous weeks. Old crop values lost £2.25 per tonne (May-19) whilst newer crops lost £1.05 per tonne (Nov-19).
Global exporters have all suffered slight drops, following the fresh US sanctions on Russia cros. The value of the rouble has dropped significantly, and the effect has carried over to fellow global exporters. He UK markets are showing a tendency to follow the French markets, with both lowering in this time of uncertainty.
The oilseed market also closed lower these past few weeks, not just in the UK, but in the US and China. In Chicago, soybean futures fell marginally (May-19), whilst old crop Paris rapeseed futures have declined by €8.00 per tonne, due to limited demand and pressured prices, as well as a lack of fresh information.
Barley prices have also suffered a discount in the UK, now at its lowest since early August 2018. This is due to a lack of demand as animal feed, barley recently being reported as having decreased in its use as animal feed by an astonishing 13 percent. Despite this, the HMRC showcase that February has been a strong month for maize imports, with season-to-date maize imports being at 1.3 million tonnes, around 300Kt higher than this season in the previous year.
EU soft wheat exports forecast a positive increase overall for barley. Exports of EU wheat have increased by 10.1 million tonnes in the week leading up to February 10th. It is estimated, if these statistics continue to flourish, that full season exports of 16.4 million tonnes can be reached.
In grain markets this month, prices are as follows:
UK feed wheat futures (May-19) closed at £168.15/t, forecasting a decline of £3.75/t. New crop futures (Nov-19) also fell down £2.25/t, to close at £150.15/t
Paris wheat futures (May-19) ended the week down €7.75/t, to €196.25/t
Chicago wheat futures (May-19) fell $4.61/t compared to previous weeks
Chicago maize futures (May-19) closed at $150.69/t, up $0.20/t from previous weeks
Paris rapeseed futures (May-19) fell €8.00/t, to close at €364.00/t on Friday
In the past year, Argentina grade 2, up-river crops have seen an increase in exports by a remarkable 30 percent, whilst EU rouen has seen an increase of 10 percent. US hard red winter has seen a slight decrease, at minus three percent, but soft red winter has an increase of 12 percent.
Other crops, such as maize remain relatively stable with little fluctuations. Barley exports worldwide have seen a six percent increase. Rice, however, is showing some export decreases worldwide. Indian rice has an annual change of 14 percent, whilst Vietnamese rice exports are down by 19 percent.