Farm Ireland

Friday 23 March 2018

Markets volatile on the cusp of harvest

Caitriona Murphy

Caitriona Murphy

As combines get ready to roll across the south of the country, the volatile grain market is once again on edge.

It is estimated that between 15pc and 30pc of the harvest has already been sold forward by farmers but the remainder have opted to wait for harvest prices.

Prices of €174/t for green barley and €184/t for green wheat were on offer from Glanbia since the last harvest, and presumably bigger suppliers would have negotiated for higher.

Early last week, prices were €20/t lower at €154/t, and as the week unfolded they weakened further. The release of a bearish report from the United States Department of Agriculture (USDA) on Thursday prompted a rush out of grain stock, with prices on all international markets falling as a result.

The USDA reported that this year's area of maize planted was the second highest since World War II and stocks are also higher than expected. While wheat and soyabean planting is down, the USDA reported higher than expected stocks on hand.

The news caused investors to rush out grains, resulting in Chicago prices falling.

In Europe, new crop November wheat fell by £11.45/t (€12.66/t) to £157.05/t (€173.75/t), while November Paris wheat closed €15.25/t lower at €184.50/t and May 2012 fell €13/t to €192.75/t.

The market rebounded somewhat on Friday after Thursday's steep losses, with London wheat regaining £3.45/t (€3.81/t) to £174.45/t (€177.58/t). In Paris, November wheat on the Matif gained €3.25/t to finish at €187.75/t.

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Yesterday morning the recovery continued in the early trading, with November 2011 wheat up £1.75 (€1.94) to £162.25/t (€179.84/t) but the harvest price remained unchanged at £174.45 (€177.58). November wheat on the MATIF rose by €3.25 in the morning to €193.75/t.

Looking at the Irish harvest, crops are shaping up nicely, according to Teagasc tillage expert Jim O'Mahony.

"Winter barley is ripening well and winter wheat is also looking very well," he said.

"There is a bit more disease than expected in winter wheat and aphids are still a problem in all cereal crops.

"Winter oats are looking well despite the frost damage and although the plant population is much reduced in some crops, they are exceptionally clean."

Meanwhile, concern is mounting about the rising cost of fertiliser on the international markets.

Urea prices have increased by $135/t (¤93/t) in the past four weeks, effectively pressing the pause button on any forward buying.

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