Cefetra Market Report:
Late October 2023
This year’s weather continues to test us, initially with a wet harvest and now biblical rains and flooding. Many growers still have areas to drill, having held off as late as possible in an attempt to get on top of the increasing black grass problem we are facing. There is still time to get grains in the ground and thankfully the ground temperature will still be warm enough to get crops away if things do dry up, but a few are starting to get twitchy as we head towards the end of the year. There are certainly areas drilled a few weeks ago that will have sat wet for some time and will need re-drilling in the weather allows over the next few weeks (see image of flooded fields in Linconshire shortly after being drilled).
The UK wheat market appears to be driven mainly by Ethanol producers in the North at present, with no fresh export demand and feed demand lower. This, along with the lack of farmer selling saw physical premiums and values creeping up in the middle of October as merchants needed to pay up to cover shorts into the North. This will be the cause of greater-than-usual variances in price in the market at the moment as some merchants are more desperate to cover shorts than others depending on location.
On farm values appear to have eased back slightly this week as a short spike in the market brought some sellers out again to top up their pre-Christmas sales before closing the shed doors until the New Year. I imagine the wide range of prices in the marketplace may continue for some time.
Fundamentally, there isn’t a huge amount of fresh news out there at present. China is buying reasonable volumes of grains from various origins, re-stocking reserves after selling considerable tonnages for historic money over the past year and a half. Notably they are buying maize from Ukraine, which will be shipped on Panamaxes out of the deep sea ports. This is astonishing considering the amount of headlines we saw showing missile strikes in Odessa over the past few months. This will be keeping a lid on prices as the lineup of vessels out of the Black Sea ports such as Odessa and Yuzhnyi continues to grow, all of which is being done without Russia’s backing.
News reports and stories from the Ukraine conflict have dropped off a cliff at present whilst equally worrying attacks unfold between Israel and Palestine. On the back of escalations there, oil values started to creep back towards recent highs. Unfortunately, this is not being reflected in our oilseed prices on farm. Oilseed rape has a foot in both camps, veg oils and global oil/energies, but it seems for the moment that the large supply of vegetable oils, mostly in soyabeans is the overpowering factor.
Domestic marketing should maintain a focus of hitting the rare “Up” days because the underlying strength is just not there, and prices erode really quickly. Keep in touch with your merchant and leave market targets and even orders to trade for your best chance of achieving a fair result relative to the average of the prices that the market might offer.
To find out more, please contact the team at Cefetra Grain: