Crop forecasts and trade issues put grain prices under pressure

New-crop grain prices have come under more pressure on crop and stock forecasts, alongside growing concerns at US-China trade duties being ramped up again.

Chicago, Paris and UK new-crop wheat futures fell to contract lows on Monday (13 May) after the US Department of Agriculture (USDA) released its first new-crop estimates.

This saw London’s November 2019 feed wheat contract fall to and close at £141/t on Monday (13 May), losing 70p on the day, in stark contrast to its high of £179.4/t in late July last year.

The contract had already lost just over £2/t in the week to Friday 10 May.

See also: 6 top tips to minimise compaction at harvest

The USDA numbers included:

  • Global maize production in 2019-20 to rise 14.8m tonnes to 1.134bn tonnes, putting total global supply at a record 1.460bn tonnes
  • Global wheat production also set to rise for 2019-20 by 45.9m tonnes to a record 777.5m tonnes
  • EU wheat production at 153.8m tonnes – a four-year high
  • Ukrainian wheat production of 29m tonnes – the largest in almost 30 years
  • Russian wheat at 77m tonnes would be the second-biggest crop ever.
  • A slight rise in US wheat production, although on a reduced area
  • Barley – global production in 2019-20 rising to an 11-year high, mainly on EU production rising by  6m tonnes, to 62m tonnes

Ukraine, Turkey, Russia and Canada are all also forecast year-on-year increases in barley crop size and, despite higher demand form importers, season end stocks are set to rise in 2019-20.

With larger Black Sea crops forecast, this may increase export competition into the Middle Eastern and North African markets, said AHDB Cereals and Oilseeds.  

As 2019-20 is likely to see an increased domestic exportable surplus, this could put further pressure UK barley markets, it warned.

The AHDB reported continued falls in domestic old-crop prices, with delivered bread wheat and feed wheat prices (May) falling by £3-£5/t week-on-week amid reduced demand and new-crop expectations.

Old-crop feed barley has fallen further, as East Anglia has now moved to an export-competitive price level.

Upcoming Webinar

AUGUST
19

How to best plan your farming retirement and pension

With BPS being phased out and new schemes being put in place in the next few years, it’s an important time for farmers to start planning retirement and the best way to secure their pensions. Whether you are considering a succession process or would like to retire from the industry outright, our panel of experts will go through all the options you need to consider no matter what your life plan looks like. Join the session at 17.00 - 18:15 on Thursday 19 August 2021.
Register

Online grain trading made easy with Farmers Weekly Graindex

It takes just a couple of minutes to create a listing on Farmers Weekly Graindex and you’ll get a range of prices to compare from active buyers who want your grain.
Visit Farmers Weekly Graindex

Online grain trading made easy with Farmers Weekly Graindex

It takes just a couple of minutes to create a listing on Farmers Weekly Graindex and you’ll get a range of prices to compare from active buyers who want your grain.
Visit Farmers Weekly Graindex