Archive Article: 1997/09/20

20 September 1997

MARKETING your own grain? Dont be overwhelmed by the mass of information on grain price fluctuations, Chicago futures, Ukrainian frosts, Chinese beer consumption, and European crop quality.

Getting hold of easily understood information quickly is important to both growers and traders of cereals and oilseeds. Given the volatility of markets these days, quicker is better.

While there are many factors outside the control of growers, they need increasingly to gather a wide range of data and background to help them reach informed marketing decisions.

Those who have recently chosen to hand over their grain marketing function to a pool or managed fund still need access to information which will help them make this decision and, in some cases, at what point to accept the daily price offered by their fund.

Others who want to market their grain themselves seek independent sources against which to balance what traders are telling them.

Agrimonetary issues, Agenda 2000, area payment rates and the next world trade agreement are just a few factors which will have important implications for markets in future and for profitability on arable farms.

But when and how will they impinge on your decision to buy or hold on to grain? Entrants in this years Crops Grain Marketing Challenge are gaining extra insight into just this.

Each contestant gets a regular bulletin produced by the Home-Grown Cereals Authoritys market information department for which these immediate and longer term influences on grain markets are meat and drink.

Direct information

There may once have been a perception that HGCA information is directed at the trade and perhaps somewhat too sophisticated for the grower – even though his levy payments underpin the HGCA structure.

However, new services are directly aimed at the grower, including a shorter version of the Weekly Bulletin, the mainstay of the HGCAs publications.

The Bulletin includes weekly spot and forward grain prices, volumes traded, trade statistics, feed ingredient prices, EU grain prices, intervention activity, area payment rates, EU export awards, agrimoney details and market comment on many of these areas.

The shorter four page version aimed at growers will include prices, agrimoney and market comment, says senior economist Heike Hintze.

While the postal service of the Bulletins and many other paper publications from the market information department will continue, recent months have seen expansion of on-line services to give more up-to-date information.

Daily price reports through the HGCA fax-on-demand service are updated twice daily to give midday and evening closing prices for London futures, plus market comment and agrimonetary information such as green rate changes.

More of the 30,000 or so telephone calls to the market information department every year now come from growers since the HGCA increased its presence at farming events in recent years and forged new links with growers.

Trade queries still dominate, but Ms Hintze stresses that the seven economists and three statisticians are all available to explain to growers the changes in the market and what may be in store.

"Of course, what they all want to know is what will the price be. We cant tell them that but we can talk to them about what the influences are on the market," says Ms Hintze.

The HGCAs internet service is currently free, giving daily cereal and oilseed prices, agrimoney updates, the latest trade statistics and reports on other areas such as planting surveys. Much of this information also goes to the Farming Online service.

Those growers with CEEFAX on their televisions can obtain daily ex-farm spot prices through this source, and a free answerphone service also gives the daily ex-farm spot prices, futures prices and agrimoney information.

While the HGCA has a statutory role for the collection of prices and volumes traded through merchants and co-ops, known as the Corn Returns, it also conducts a wide range of surveys and special reports giving more in depth information on markets.

Its planting survey appears before official MAFF figures and is respected by the trade for its accuracy. Road haulage is surveyed annually for prices and distances, while there is also a daily price telephone survey around the regions.

The progress of grain quality through the harvest is updated several times each season in the authoritys quality survey.

Comments on the improvement or worsening of malting barley nitrogen levels, for example, might help a grower decide on harvest, storage or selling strategies.

Detailed areas

The Weekly Digest looks at two or three areas in more detail than is available in the bulletin. Recent subjects included the use of options for price protection of grain, including worked examples of possible grower marketing strategies.

Price reporting of oilseeds was brought within the remit of the market information department in July 1995. A monthly oilseeds review looks at prices and factors affecting the market.

Areas relevant to growers in the last issue included reports on Agenda 2000 and its implications for the UK oilseed sector, world oilseed production estimates and price developments.

As well as the implications for prices, HGCA economists increasingly take the figures for both cereals and oilseeds further to look at the potential effect of policy changes on margins per hectare on the farm, providing growers with figures on which to make planting or marketing decisions.

With the move towards trade at world grain prices, the influences around the globe on grain prices and those of competing commodities become increasingly relevant to UK growers.

The collection of UK, EU and world data by the HGCAs market information department, and its subsequent analysis, distils a vast amount of information into an accessible form.

The emphasis in future will continue to be to present that information in a format that will be useful to growers as well as to the trade, says Ms Hintze.

The grain trade is well tuned into the HGCAs market monitoring, but few growers exploit the organisations independent advice. Suzie Horne looks at whats available.

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