Gearing up for spring
As we finally turn the page on one of the wettest February's on record, the focus turns to getting back in the fields - a lot of unanticipated spring planting, disease control and ongoing decisions regarding when to sell and how Countryside Stewardship / SFI can best be adopted for each farm, to offset BPS losses.
Bayer provide a great deal of information on iblon for wheat disease control. With a tough grain market over the past few months, Cefetra Grain provide an overview of how the global grain markets are likely to impact prices going forward. With margins continuing to be under pressure, Orion Farming Group undertake a 'benchmarking' exercise for farms considering joining, to take the guesswork out of the financial gains from joining. TVE Hire & Sales, an approved Avant dealer are also providing some great offers and finance packages on new and used Avant loaders. Finally, as demand for Countryside Stewardship / SFI grows, the Farm Economics App from Demand Economics keeps all your options, required management actions and maps together in one place on your desktop and smartphone. We hear the occasional horror story of farms caught short by inspectors, and County Insurance offer a range of insurance to cover such events.
CEFETRA'S GLOBAL AND EUROPEAN TAKE ON GRAIN MARKETS - LATE FEB '24 MARKET REPORT
We saw much of the same in terms of market action in the weeks following on from last month’s write up. Thankfully, there was some welcome respite last week as Liffe wheat futures bounced off recent lows, not seen since December 2019. Unfortunately, it doesn’t appear that this is on the back of any fundamental changes in S+D’s, more likely to be a retracement after such a big fall lower.
There are no real weather issues at present outside of Europe, which of course has seen significant rains for months. Worth noting that France and Germany have had better weather than the UK recently and remain in line with the 5-year average in terms of spring barley plantings. On the back of prolonged rains, new crop barley premiums have increased slightly as the trade begin to wonder whether the total planned spring barley area will be completed. After what is likely to be the wettest February on record here in the UK.
French export pace has crept higher than expected recently after more successful sales to the MENA region (Middle East and North Africa) as well as China. If this export pace is maintained throughout the rest of the season, then the French carry out may not be as significant as originally expected. This, added with persisting wet weather in Europe and poor winter crop conditions, could perhaps become important for prices going forward. Providing that Russia do not try to regain their export momentum and lower their values to become competitive, which could once again take the demand away from France. In which case France could end up much closer to the carry out that was originally expected, potentially one of the largest since 2005! This could unfortunately become the reality as Russia recently increased their export quota by 4 million tonnes, so will not be keen on missing sales.
Another factor that has historically had an effect on old crop values is the Brazilian Safrinha corn crop, which is being drilled at present. With favourable weather and drilling conditions over there, the current planting status of the crop is above the 5-year max average. So certainly no issues arising to worry the market for the time being.
The frustration with the markets does not appear to be going away just yet as the futures screen looks weaker at the time of writing. It appears funds are adding to short positions as there is little to no fundamental change on the global picture as explained previously. Over supply on the old crop remains at the forefront of everyone’s mind as various origins battle for export demand. When this is taken into account, it makes the dramatic fall in commodity prices seem a bit more justified, but by no means ideal. Values for most commodities sat in the shed unsold now are below the cost of production and new crop is becoming marginal I am told by growers. The high input costs for this years crop have been the real killer and we knew this year was always going to be a tough one.
As always, margins should be locked into if the market allows, this includes new crop – as you could argue that it is just as much of a risk in these times not to sell forward. Perhaps as we edge closer to this year’s harvest without much to sing and dance about in terms of what is in the ground and how it looks, the market might begin to have a different view on values. Until then, the oversupply is the real issue and the main driver of the market.
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
ORION FARMING GROUP - A NOT FOR PROFIT BUYING GROUP - TAKES THE GUESSWORK OUT OF JOINING
With 350 farm members and over 400 suppliers, Orion Farming Group, as a not for profit buying group, passes on all supplier discounts to farmers. For farms considering the benefits of joining Orion, we undertake a benchmarking exercise for you where we take invoices of your choice and determine the costs if you had ordered the same product at the same time via Orion. Phil Kinch, a farmer and Orion Board Member explains in more detail below.
UNDERSTAND AND KEEP ON TOP OF YOUR COUNTRYSIDE STEWARDSHIP / SFI OPTIONS
As more farms take up these options, understand the Options most suitable to you and easily manage the compulsory information requirements via the Farm Economics App - containing all your CSS/SFI information and maps in one place on your desktop and smartphone.
TVE HIRE & SALES HAVE GREAT FINANCE OFFERS ON AVANT LOADERS PLUS OFFERS ON EX-DEMO MACHINES
Contact us to find out more about any of these topics