Farm Ireland
Independent.ie

Monday 23 January 2017

Grainmen seek better prices as just 5pc of crops to be harvested

Growers hopeful of boost to returns as US and Russia hit by harvest woes

Published 07/09/2010 | 05:00

Despite the poor weather forecast for this week, grain farmers are content as most of the harvest is now in store. Merchants suggest that 5pc of late-sown spring crops are still to be cut in the northeast.

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Most farmers that haven't already done grain deals are holding out in the expectation that increases in grain prices since last July will continue.

This comes on the back of reports of a smaller than expected US corn harvest and an extension of the ban on Russian grain exports until after next year's harvest.

Jump

These developments fed into a €10/t jump on London feed wheat markets last week and a further €5.40 yesterday morning. That left November contract prices for wheat on the LIFFE UK market just shy of €200/t this week, with milling wheat on the French MATIF hitting €234/t.

The IFA reports that spot prices for imported wheat are more than €200/t.

Merchant intake was well back on last year as yields came in below average. Low moistures also facilitated on-farm storage and inter-farm trade. Recent announcements of a €50/t increase in compound feed prices boosted farm-to-farm trade even more.

"Feed grain prices have moved to a new level in the past week," said IFA grain committee chairman Noel Delany.

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"A number of farmers holding grain are cutting deals for barley from €154-156/t for green barley (20pc) plus transport allowances," he said.

"Prices for green barley delivered during the harvest are settling from €145-150/t plus an additional €5-7/t of transport allowance. Green wheat prices are from €158-170/t with similar transport allowances."

Down

US analysts Informa Economics revised this year's US maize harvest expectations down by almost 4pc.

The news saw fund investors buy 25,000 corn contracts on the main grain markets in Chicago on Friday and maize corn futures were pushed to a two-year high.

Meanwhile, strong export demand for EU and US wheat saw prices rise further.

Since the start of the new season harvest nine weeks ago, EU soft wheat exports have jumped by 16.6pc and new season imports are down. France has been the main beneficiary, with wheat exports 50pc ahead of last year. Supplies are tightening as French farmers stand-off selling in anticipation of further price rises.

Rains

Elsewhere in northern Europe, heavy rains over the past few weeks have impacted on milling quality, with potentially up to half of the German milling wheat crop now destined for the feed wheat market.

Germany's farm ministry estimates that this season's grain crop will be 12pc below last season.

However, concerns are being expressed privately about the possibility of a switch to other commodities by feeders if current price trends continue for much longer.

The actual yields from the US maize harvet hold the key to this and for this reason all eyes will be focused on the UDA harvest report that is due to be issued this Friday. Any new downgrades on predicted yields will pile further pressure on prices.

Irish Independent