Rape prices remain firm despite volatility (From Gazette & Herald)

Rape prices remain firm despite volatility

3:51pm Wednesday 11th January 2012 in Farming news

WELCOME to our new monthly grain market update, brought to you by EMMA CROFT of Anderson Grain Marketing Ltd who will consider the global factors which determine the direction of UK grain prices

THE ‘mini revival’ described last week, ‘mini’ being the optimum word here, has unfortunately begun to slow this week.

Formerly reluctant farm sellers became suddenly enthused as feed wheat prices once again hit £150/T ex-farm, bringing initial high trading volumes.

However, South American weather conditions have slightly improved over the weekend and much needed further rainfall is due later this week as Argentinian/Brazilian maize crops enter their critical flowering stages. Preliminary yield estimate reductions here are now believed to have been overly optimistic; the extent of the damage already done is however largely debatable and whichever the market decides to side with could predominantly determine price direction over the next few weeks.

Nevertheless, ex-farm spot feed wheat prices remain around £6/T higher than their pre-Christmas offerings of £140/T to between £145-£147/T. As for the month ahead, prices remain victim to weather conditions for both the harvests across the Southern hemisphere and cropping conditions in the North. Tomorrow’s (Thursday) USDA WASDE (latest global supply and demand figures) should give some more long-term market direction.

OSR prices are on the other hand remaining firm and proving to be an excellent selling opportunity; prices reached highs of around £360/T spot ex-farm last week.

Australia is however due to bring their record 3M/T+ canola crop into the market place at the end of this month which could potentially pressure such prices.

Malting barley premiums for old crop have also held over Christmas and appear to be more resilient to the volatility demonstrated elsewhere.

Additionally, although domestic malting demand is currently limited (they are reluctant to cover forward supplies without any base orders from brewers, who are currently seeking a further decline in raw material prices), export demand remains firm. Feed barley prices on the other hand have followed suit with wheat and have slipped below the £150/T ex-farm benchmark.