The gap between old crop and new crop wheat continues to narrow, with spot prices crashing by another £9/t over the past week, and November values rising by £7/t.
“The EU is really feeling the stress of the dry weather. Unless we get some rain the malting barley crop in East Anglia could be a write-off,” says Simon Ingle head of central stores marketing at Openfield. “Second, late-drilled or poorly established wheats are also in a serious state, and yield losses will be significant if we don’t get rain soon.”
Strategie Grains has cut its forecast for the EU-27 soft wheat crop by 3.6m tonnes, to 131.5m tonnes, mainly due to drought in the top three wheat producers; France, Germany and Britain. Reports of drought in Russia and Ukraine further boosted market sentiment on Wednesday (18 May).
Oilseed rape markets are similarly buoyant, with old crop values rising by £14/t over the past week, and November futures up by €11.25/t (£9.90/t). Oilworld has cut its estimate of EU rapeseed production by 1m tonnes, to 19.5m tonnes – the lowest level since 2008-09. “Crops in Europe require more precipitation and, until they receive this, prices will remain underpinned,” says Gleadell‘s Jonathan Lane.