AgriFacts March 2019 Your monthly roundup of news, prices and other farming matters
Market Commentary It’s now only a few of weeks to go until the UK leaves the EU. Or is it? Bookies odds have been consistently predicting an extension to Article 50. Some suggest this could be for a ‘short’ period, others say until the end of July, yet others fear it could extend into an indefinite period. Would this extension be in place, the UK remains a defacto member of the EU, with all the rights and obligations that entails. The current trade tariff regime will also apply. With an element of uncertainty likely to be resolved, this has allowed sterling to recover sharply. Against the euro, the pound has broken through (strengthened) a relatively narrow trading range that has been in place since September 2017. The negative impact of this on our domestic wheat prices is in addition to the sharp price movements overseas. World grain prices plunged dramatically in February. Russia, Australia, US, Ukraine and EU values all show steep losses for February. Indeed, France’s futures prices are £15 lower than at 1st Feb, while US wheat values are some £18/t down. LIFFE wheat futures ‘only’ shed £9 over the same period. As such the price spread between the UK and France has moved from around -£8, to +£2 in three weeks, in doing so making the UK currently attractive again for imports. While there are numerous reasons why the global sell-off occurred, the trigger was a poor reading for US sales a few weeks back. Generally favourable crop conditions, slow exports from the EU and US, question marks over the level of remaining global import demand alongside the dwindling amount of time before freshly harvested supplies are available all contributed to the price declines.
has offered to buy $30bn worth of US agricultural produce. If this were to eventuate, then Chicago’s futures markets would certainly sit up and take notice! Furthermore, markets are currently pricing-in almost perfect global crop conditions. This, before the world’s largest crop – US corn – has yet to be planted. Last year, Europe’s crop yields suffered from very hot and dry conditions in May and most of Continental Europe and the UK have yet to recover properly from highly deficit soil moisture conditions. That said, UK crop conditions currently look very good nationwide, with the recent dry and warm spell allowing farmers to start fieldwork. Without a repeat of last year’s late-season heatwave, new crop could be the first season in the last three when the UK will be a net exporter. The price spread between the UK and the continent will need to reflect this fact, with currency movements highly influential again. Good news greeted the grains industry recently, with the announcement that Ensus, the ethanol factory in the north east, will be re-opening in March. Time will tell how much grain they will use, but on paper imported maize would seem the most logical choice in the short term. Rupert Somerscales Senior Consultant ODA-Agri
On the positive side, the world balance sheet remains relatively tight historically, with a very low stocks/use ratio when China is excluded. In an attempt to break the negotiation deadlock between the US and China, the latter
Month (ex farm) Midlands
Feed Wheat
Feed Barley
Oilseed Rape
Currency
Mar 2019
£159.00/t
£134
£303
£/€ = 1.1583
Apr 2019
£160.00/t
£135
£304
€/£ = 0.8633
May 2019
£161.00/t
£136
£305
$/£ = 0.7619
Milk Data
Avg Monthly Price
UK Farmgate Milk Price
29.85ppl
Fuel/Straw/Silage
Price
Fertiliser
Price
Red Diesel
57.1p/litre
34% N AN (bags UK) £/tonne
£277.00
Big sq Baled Wheat Straw
£54.00/tonne
0:24:24 blend (bags) £/tonne
£287.00
Big Bale Hay
£130.00/tonne
20:10:10 blend (bags) £tonne
£273.00
p/kg dwt
Finished Steers
Finished Lambs
Finished Pigs
347.1
419.7
143.8