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Wheat Market Update - Thursday 30th August 2007UK & Europe IGC (International Grains Council) have cut World wheat production
by 7 million tonnes, down from 614mt to 607mt. Summary Production figures continue to fall, import interest increases, and
prices continue to rise. Wheat Market Update - Tuesday 21st August 2007UK & Europe The market continues to show high prices as ongoing crop concerns around the globe persist. Rain interruptions in the UK last week, and forecast for the early part of this week, have hampered harvest progress. On crops harvested to date it would appear that yields are likely to be approximately 10% down, and also quality is likely to be more variable, with a greater percentage of the crop being lower quality.
France and Germany, the largest EU producers, have all but completed their harvest, but both have suffered from reduced yields and have seen an increased quality premium affect their cash prices as quality issues, especially those surrounding specific weight, give the market cause for concern.
Strategie Grains, a leading independent analyst, issued their Supply and Demand figures on Thursday and reduced the EU-27 Soft Wheat crop by 4.8mt to 114.1 mt. This however may not be the final crop reduction and there is scope for further reductions in the production estimates. For example Strategie Grains have the UK crop estimate at 14.4 MMT and this would appear to be too high with industry estimates being between 13.5 MMT and 14.0 MMT.
The LIFFE November 2007 feed wheat values increased again, with a week
on week increase of £ 5.25. The graph below shows how far the
feed prices have come over the last few weeks and consequently Bread-making
wheat delivered Liverpool for November 07 has traded above £ 190
per tonne.
World Wheat The US continues to see increased demand that has helped to support prices. Last week US export figures topped 1.2 MMT, against an anticipated volume of 400,000 – 600,000 mt. This is despite seeing freight prices at a record high.
As the US and EU harvest finishes, attention will start to turn more to Australia and Argentina and whether their crop will be able to satisfy other export shortfalls. Current trade supply and demand estimates have Australia production estimated at 22 – 23 MMT (versus 9.8 MMT last year). However drought concerns are already being raised in key growing areas with rains required. With World stocks already at a record low this area will need to be watched carefully in the coming months. Summary Continued nearby demand is giving good support to spot wheat prices,
and with the world supply and demand balance sheet looking tight there
appears no end in sight to these high prices levels continuing. Wheat Market Update - Monday 13th August 2007UK & Europe A week of good weather has allowed good harvest progress across most
of Europe and harvest in both Germany and France is nearing completion
with yields reported 10-15% down against last season. In the UK we have
seen a similar picture developing with lower yields and lower quality
than last season being reported. World Wheat The USDA lowered World wheat production last week to 610mt (previously 612mt).In addition world ending stocks were lowered by a further 1.8mt to 114.8mt. US CBOT December futures wheat breached $7 last week following firmer EU markets and continued good export demand. Summary The pattern of lower yields seen in Germany and France has been repeated
in the UK. Lower production across Europe has led to all wheat market
prices rising sharply. Within the UK Supply and Demand has become a
real concern with indications now that total production is estimated
to be only c.13.7-14.2mt (14.7mt 2006) and the tightness of Supply Vs
Demand coupled with expected lower quality wheat than last year looks
set to keep prices steady over the coming months. Wheat Market Update - Friday 3rd August 2007UK & Europe Finally better weather has arrived allowing the wheat harvest to start. However, unripe crops are delaying progress in the UK and farmers still have oilseed rape and barley harvesting to complete. Deliveries of new crop grains and oilseeds that are available to processors are presently being hampered by a severe shortage of available road haulage.
Many early wheat yields have followed those seen in Germany and France and have been reported some 10% lower than last year. Quality appears to be mixed but this must be balanced with the fact that we are seeing crops harvested on the lighter land at present.
The sentiment of EU wheat futures markets have reacted to lower yields and values have revisited contract highs seen last week. November Liffe 07 futures are valued once again at £135/t and the price of bread making wheat delivered Liverpool currently exceeds £170/t for all delivery months.
Further support for wheat prices has been seen as a consequence of a downgrade of the Eastern European maize production estimates which, due to the extreme drought, have been reduced by up to 50%. World Wheat Extreme heat in Canada has raised concerns that wheat production could be lower than forecast last month. The Canadian Wheat Board has indicated that all wheat production could be reduced by some 1.3 million tonnes down to just 20mt and down 5mt from last year.
US wheat futures have risen sharply once again and continue to find support from a second week of record wheat export sales as well as the firmness of European and global grains markets. Summary Production concerns around the globe continue to provide support for rising wheat prices and demand remains in place with processors succumbing to having to pay higher prices.
The weather patterns experienced over the coming weeks will be key to future price direction as harvest progresses and further downgrades of production estimates or quality will only add further support to wheat prices. |
