Demand Economics
Agri-Business Consulting
+44 7907 581 094​
Monthly eNewsletter
1st October 2023
Cefetra Late September Market Report
As I write this month’s report the market feels slightly better supported than in previous weeks. Now that harvest pressure globally is beginning to ease slightly, various market scenarios are starting to play out as eyes are drawn once again to Supply & Demand figures.
Australia is now facing some prolonged hot & dry weather, with no rain in the forecast for the foreseeable future. Analysts have therefore started revising wheat and canola production estimates down, with a risk of dropping lower as each week goes by without rain. Russian wheat production estimates have also been lowered by around 0.5MT (albeit still leaving a colossal crop) whilst Ukraine’s total grain production is expected to increase by 1.1MT. (Ceras Analytics, 2023).​
Politically there are still a few issues with destinations for Ukrainian grain, as neighbouring countries are affected by low values due to the conflict and closure of the Black Sea grain corridor. Numerous EU countries have banned the importing of Ukrainian grain to protect their own farmers and production, yet Ukraine still manage to increase their export capacity as the months go by, potentially hitting a record this month if they continue current trajectory. It’s also worth noting that this is with the Danube capacity reported to be down by 0.5MT after recent drone strikes and attacks.
Interestingly, the Russian wheat export price that was set some months back to put a floor in the market seems to be being monitored properly now, after appearing to be left unchecked for a while. In the past couple of weeks, one Russia merchant offered and sold wheat below this floor price and is reportedly facing some serious repercussions from the state department. As a consequence of this, in the most recent international tender Russia was not the cheapest seller as it has been for some time. This could change the dynamic of the global market (in particular the Russia-to-Egypt business) and help EU wheat gain some demand as EU grains appear competitive while the Russian floor price holds firm.
​
Closer to home, domestic buying remains quiet as every week the consumers hold off, prices have continued to decline. This may have begun to change in the past couple of days as the market looks set to find a bit of momentum on the back of the narratives above. The UK remains uncompetitive for wheat exports at this time however, with coaster-size parcels at least £10 a tonne too pricey.
​
On farm, the round numbers of £200/t for feed wheat and £180 for barley pre-Christmas seem to be popular target levels. We believe many farmers are not well sold in terms of tonnages on the books at present. This could actually end up causing its own issue as everyone appears to be waiting for the same price level!
​
£200 for harvest ‘24 wheat is likely to be quoted sooner than it is for this current harvest, with the spread between Nov23 and Nov24 LIFFE futures currently around £10. We would recommend keeping an eye on this – with fertiliser prices significantly lower than last year for the crop being drilled any moment now, £200 for Harvest’24 wheat should show a good margin to lock in to.
As ever, keep in touch with your merchant. Let them know your ideas and targets so they can keep an eye on the markets for you while you are busy in the field and concentrating on other things.
​
To find out more, please contact the team at Cefetra Grain:
-
Simon Wilcox, Manager – UK Farm Grain Origination, 07774 822507, wilcox@cefetra.co.uk
-
Josef Grinczer, Farm Grain Buyer, 07712 325197, grinczer@cefetra.co.uk
-
Ian Jervis, Farm Grain Buyer, 07497 185361, jervis@cefetra.co.uk
Access all the latest Orion Farming Group communications via the Orion App
In addition to this monthly eNewsletter, Orion issue a Weekly Fuel Update and a Weekly Straights Update. You can now access all the latest monthly and weekly communications, including important ad hoc communications such as Chemical Notices, via the Orion App. Contact Adam Donaldson on 07907 581094 for more information.
Feed & Livestock Section
Minerals
Group prices have been received for the Orion spec minerals for Q4 (Oct – Dec) and members have been informed in a separate email as to which supplier is the preferred choice to supply the Group during this period. Please bear it in mind when ordering minerals, that the lead time is 6- 8 working days. Certain members choose to source their bespoke minerals from suppliers who are not the preferred supplier of Group minerals in any particular quarter. If you are a member who sources your minerals from a supplier who isn’t the Group supplier and would like to undertake a small benchmarking exercise, please send your spec to the office, where it will be forwarded onto the Group supplier to price up.
Molasses
Group prices have been received for molasses for the period 1st October 2023- 30th April 2024 and members have been informed in a separate email as to which supplier is the preferred choice to supply the Group during this period
A quick reminder
From time to time, invoices arrive at the office from members who’ve ordered commodities, particularly feed supplements and forage and harvest products directly from merchants or suppliers which have cost more than had they been ordered through the office. When this happens, members are made aware of the savings that they could have made, so it’s always worth phoning, texting or emailing the office with your requirements, to take full advantage of any savings available to the Group.
And Finally...
The circumference of the earth was estimated by Eratosthenes of Cyrene over 2,000 years ago and he was only 1% out and when the first avocados were sold by Marks & Spencer, they came with a leaflet explaining how to eat them.
For more details on any matter raised in the Feed & Livestock section, please contact Joe in the office:
Joe Cobb, Feed & Livestock Manager, 01865 393 139
