Livestock demand set to affect cereals and oilseed prospects
© Tim Scrivener Oilseed rape
Demand for rapeseed in the UK is relatively stable, according to the latest AHDB Agri-Market Outlook, covering the next six months.
The main factor that could possibly temper demand for the 2022/23 marketing year is rape meal in livestock feed, said AHDB analysts.
This is being put down to inflation and recession fears, with forecasts estimating the UK sow herd will fall and the dairy herd will shrink, with little incentive to expand.
See also: Harvest 2022: Hampshire wheat shows high yield despite low protein
The organisation suggests UK rapeseed production during 2022 will rise above last year’s levels to 1.1m tonnes.
The harvested area is forecast to be up by 9% on last year, with average yields estimated at 3.2-3.6t/ha.
Prices collected by Farmers Weekly on Friday 12 August put ex-farm spot oilseed rape at £531.15/t, in a range from £522/t in Norfolk and Suffolk to £537/t in Oxfordshire, Buckinghamshire, and Northamptonshire.
OSR trade
The UK is expected to remain a net importer for rapeseed, with a large supply of imports from Europe, and production on the Continent also expected to be higher year-on-year.
Imports to the UK from Australia and Uruguay are likely to be seen later in the marketing year from January to June, according to AHDB.
Will Ringrose, ADM Agriculture’s head of oilseeds said: “The EU harvest is now largely complete, with yields and oils higher than expectations.”
Crude oil prices have dropped back to about $90 (£74.58) a barrel, which is putting some downwards pressure on the global market
Looking at the US harvest, Mr Ringrose said: “Weather is still being closely watched, with a potential of hot/dry conditions returning in the coming weeks. Crop ratings have slipped to 59% good to excellent verses 60% last week, while a potential increase in Chinese demand also lent support.”
Both Chicago and Paris rapeseed futures have been well supported in recent weeks.
Paris rapeseed futures (Matif) closed at €656.25/t (£555.94/t) for November 2022 on 12 August, down marginally from €653.25/t (£550.48/t) a week earlier.
Wheat
The AHDB forecasts average wheat yields in the UK at 7.93t/ha.
Total wheat production is put at 14.33m tonnes, based off a wheat area of 1.8m ha. This forecast puts UK wheat production up by 2.4% compared to last year.
About 60-70% of the UK wheat harvest had been completed nationally by the end of last week, according to Jonathan Lane, ADM Agriculture’s head of grain trading.
Mr Lane said: “Yields on some later crops in Lincolnshire, Yorkshire and further north seem to have done markedly better than eastern light land wheats and our overall 8.5t/ha estimate looks pretty safe.
“The quality of the crop looks good, aside from proteins which are markedly lower. However, specific weights are fantastic and Hagberg and screenings are not causing any problems. In addition, so far mycotoxins are not an issue.”
AHDB analysts suggest that the UK is likely to be trading nearer export parity during the first part of the season, with good levels of wheat anticipated.
“However, as we move through the season, we are likely to move to trading at import parity. This season overall, the UK is anticipated to be a net importer of wheat,” said the AHDB.
Farmers Weekly ex-farm spot feed wheat prices totalled £249.87 on 12 August, up by almost £10 on the week.
Similarly to oilseeds, reduced demand for animal feed throughout the remainder of 2022 and into 2023, particularly for the pork and poultry sector, is expected to put some pressure on markets.
Barley
Winter barley yields have reportedly averaged well this season, while spring barley yields are so far coming in lower than last year due to the adverse conditions, according to the AHDB.
Its 2022 production estimate for barley is 6.75m tonnes, down by 3% on last year’s levels.
Ex-farm spot feed barley prices on 12 August were up by £5/t to average £225.7/t.
The UK is projected to be a net exporter of barley throughout the 2022/23 marketing year, with exports expected to remain strong.