Recently in Grain trade Category

Global beer consumption topped 182.69m kilolitres in 2010, a rise of 2.4% on the previous year, according to Japanese brewer Kirin Holdings.

It sounds even more impressive when put into English - it works out at 329bn pints - or 47 pints a year for every man, woman and child on the planet. Little wonder then that barley supplies are so tight, so to speak.

It’s good news for UK producers. Between July and November, DEFRA reckons brewers, distillers and maltsters used almost 731,000t of barley, 6% higher than the previous year. And malting barley prices remain firm, up around €15/t on September levels and about €73/t above feed barley, reflecting concern over EU supplies this season.

Meanwhile, the latest USDA figures show world barley trade is set to rise by 0.2m tonnes to 16.32m tonnes in 2011/12.

Buoyant grain markets have helped grain trader Wessex Grain make record annual profits in the year to 31 July 2011.

The company made an operating profit of £427,127 on turnover of nearly £56m, significantly up on the £41m the previous year.

“Not only were the markets buoyant, with feed wheat prices increasing by £80/t from the market lows, but for significant periods, the market followed clear trends which the company took advantage of,” managing director Simon Wilcox said.

The business opened its expanded Henstridge store in July, providing space for an extra 20,000t of grain and boosting overall capacity to around 70,000t.

Gleadell Agriculture has announced it is to buy the specialist pea and bean seed company Dunns (Long Sutton) Ltd.

The company said it had reached “agreement in principle” to buy the holding company of Dunns, Tabmellow Ltd, subject to the necessary legal procedures and expected the deal to be completed within the next three months.

"The companies have traded together for over ten years and see clear benefits for Dunns from the support provided by Gleadell’s shareholders Toepfer International and Invivo,” a Gleadell statement said.

“In addition, Dunns’ expertise in both the seed and pulse sectors will provide good synergy alongside Gleadell’s international export pulse trading activities and growing seed business."

A new contract to attract growers of two speciality white wheat varieties has been launched by Openfield.

It is offering a premium of £30/t over feed for the spring variety Zircon and winter variety Heroldo, with the option to receive a reduced premium of £25/t for samples that meet the minimum 11% protein, but have lower Hagbergs and specific weights (see below).

Both wheats will be used for the production of breakfast cereals by Weetabix and Morning Foods.

“There is strong market demand for these varieties and as such we are offering what we believe is the best premium in the market,” said Chris Martin, contracts manager for Openfield.

With Group 1 wheats currently attracting premiums of around £20/t and Group 2s nearer £13-15/t, Mr Martin reckoned the gross margin from the white wheats would outperform open market varieties.

Provided crops were managed well, growers should have no problem hitting the required specification, he added. “Despite an official Hagberg of 179, 40% of commercial crops met the target of 225 and no commercial crops have been rejected for exceeding the mycotoxin threshold of 700ppb.

“We do advise, however, that both varieties are sprayed with glyphosate once the crop reaches 30% moisture to kill off secondary tillers, ensure consistent ripening and preserve Hagbergs.”

Premium	Higher specification (£30/t)	Lower specification (£25/t)
Protein	11%	11%
Specific weight	76kg/hl	74kg/hl
Hagberg	225	130
Moisture	Up to 15%	Up to 15%
Ad-mix	Up to 2%	Up to 2%
DON	Up to 700ppb	Up to 700ppb
Sprouted grains	None	None

A new contract for selected growers of Null-Lox spring malting barley has been launched by Gleadell.

The 2012 contract is said to be “non-defaultable” on both quality and yield, meaning that if growers fail to deliver the designated tonnage or miss the 1.92% nitrogen spec required, they will not be penalised and are free to walk away.

Price will be based on the weekly European fob reference price at the time of sale. This is currently €220-225/t, which equates to £180-185/t ex-farm for a grower near the south coast.

Gleadell’s Stuart Shand said the non-defaultable contract could only be offered because the variety had been backed by brewers and maltsters. The barley will be malted in East Anglia and Yorkshire, as well as being exported to the continent as part of the firm’s export programme.

Scotch whisky exports were up 22% in the first six months of this year, worth £1.8bn and accounting for about 25% of all UK food and drink exports. The USA remains the main customer, with France the second most valuable market.

However the biggest percentage increases in business came in some of the emerging markets such as Asia and South America.

In 2010 Scotch Whisky Association members, representing the vast majority of the industry, used 534,000t of malted barley and 561,000t of other cereals (largely wheat). The industry procures 90% of its malted barley from Scottish sources.

My blog post last week about Gleadell having made its first shipment from the revamped port at Rye in East Sussex prompted a call from one eagle-eyed reader this week.

Having said that the port had not been used for regular grain cargoes for several years, it appears that, well, it had. Prior to the port’s new deal with Gleadell, the grain storage and marketing arm of Wingham-based Grain Harvesters had been exporting from Rye for several years. The firm’s Charles Roberts tells me that some 44,000t was exported through there in total last year, mainly wheat destined for the near continent. The firm plans to use another local port to export wheat from local growers this season.

The first cereal shipment has left Gleadell’s refurbished and expanded export facility at Rye in East Sussex.

The MV Shetland Trader was loaded with 2000 tonnes of Cordiale milling wheat, destined for a trip round the UK shores to Scotland, giving end users there quality new crop milling wheat a month before their own new crop.

“Another plus for our end user customers is that cargoes of this size are good business as they are not tying up large amounts of cash and store space - 1,500 or 2,000 tonnes every three weeks are a better bet for them,” Gleadell trading manager Marc Rogerson said.

The port at Rye had not been used for regular grain cargoes for several years, so the recent refurbishment would give farmer customers of the firm’s southern office a useful additional outlet for grain, he added.

FW has been hearing of some impressive rapeseed yields this season, despite the Spring's drought. One farming contributor in the office this week reports nearly 5t/ha in southern Oxfordshire (although he was less keen to talk about his barley).  But what remains to be seen is how much we have as a nation to export, and how this gross tonnage will influence prices. There are several ways the industry collects this information and the NFU is urging members in England and Wales to complete its harvest survey.
Chief arable adviser Guy Gagen said: “Historically, the harvest survey has proven to be a reliable estimate and provides the most accurate early forecast for UK crop yields and production levels. To ensure it is comprehensive it is vital that as many farmers as possible take part. The data gathered supports the results of DEFRA’s own survey later in the autumn and fills an important gap between harvest and when official estimates are available."

 

Animal feed use and human consumption of cereals in the EU will grow only slightly this decade but overall use is forecast to rise by about 9%.

This will take total consumption from 276m tonnes to almost 301m tonnes by 2020, with production rising at around 6% over the same period from 294.2m tonnes to 312.9m tonnes.

“Demand for cereals within the EU is being driven by a growing biofuels sector,” says HGCA’s Sarah Nightingale.

“While official targets have been set for renewable fuels, the sector has been affected by third country competition and the high price for raw materials this season. Over the next 10 years, cereal demand by this sector is expected to more than double.”