Farm Ireland

Monday 20 November 2017

South sees best of strengthened grain prices as increased stocks drawn due to cold spell

Caitriona Murphy

Caitriona Murphy

Grain prices strengthened last week as the cold spell increased the amount of grain being drawn down from stocks.

The continued strengthening of the US dollar against the euro has increased the competitiveness of EU grain on international markets.

Wheat prices ranged from €123-€127/t before the weekend, with the strongest prices being paid in the south of the country. Barley was traded at prices of €113/t to €117/t.

Higher than expected demand for barley means that the carry-over of barley stocks into the new crop harvest will now be minimal. However, wheat stocks are higher and will result in some carry-over.

Any delay in the 2010 harvest would see stock reduced by 12,000-14,000t for every week delayed and grain experts say crop development from now on will be a major factor in determining price for both old and new crop grain.

The level of spring sowings is still a source of debate, with trade sources predicting a 30pc (52,000ha) reduction in spring barley area, while the IFA estimates a fall of 20-25pc (35,000-43,000ha). Overall wheat sowings have increased marginally, while the oats area is expected to be down.

There is evidence that some grain growers have switched to alternative crops, such as oilseed rape, peas and beans, but a considerable land area is set to be sown to grass or left fallow.

Meanwhile, extreme cold weather across the EU has delayed sowings in the northern region, while heavy rains affected sowings in the Iberian Peninsula.

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In Germany, grain production is expected to fall by 3.9m tonnes to about 46m tonnes as a result of the continued cold winter.

Cold weather in the Ukraine has delayed spring sowings and over 340,000ha of winter crops will have to be re-sown due to winter kill and insufficient plant stands.

Russian grain production is also expected to fall by 10pc to under 90m tonnes due to the late spring and winter kill.

Irish Independent