Feed wheat values are mostly unchanged this week following a rather unsettled seven days for the grain markets.
Spot feed wheat values rallied to £110/T - £112/T towards the end of last week, a value not seen since early August.
This week, £110/T ex-farm would be a realistic value for November/December collection.
As for feed barley, both buyer interest and ex-farm values remain subdued. November collection is this morning offered at £97/T ex-farm.
Further progress has been made with this year’s bean harvest over the last week and both winter and spring varieties have continued to test very well. Again, quality of the spring varieties has tended to be better but results from both are encouraging.
Yields are also good with most spring crops locally achieving somewhere in the region of two tonnes per acre if not a little more – I think it is at least safe to say that many growers have been pleasantly surprised!
Elsewhere, Russia’s government has now approved proposals to reduce the export tax on wheat in order to support this season’s export program, which has so far got off to a slower start than normal.
However, it is important to note that the overall cost of the new export tax is still calculated as a percentage of the overall price. This means that the new export tax isn’t a fixed price and is therefore subject to currency fluctuations.
Currently, with currency in the exporters favour, the change is welcomed by exporting companies and is making Russian wheat appear rather competitive against other alternatives.
But, if we see currency fluctuations sway once again, this taxable percentage could actually be a lot more.
This will be worth monitoring over the next few months; if Russian supplies become increasingly less competitive, alternative (European) supplies may be worth a buyers consideration.
As for European wheat exports, 5.2 million tonnes worth of export licenses have been issued so far this season (1st July – 1st October).
This is almost 24% behind the amount of licenses issued in the first quarter of the previous trading season and demonstrates the need for European wheat supplies to become more competitive within the global wheat market.
Meanwhile, OSR values have slightly increased this week – £258/T ex-farm currently looks like a realistic offer for November collection.
