Read our commentary on latest developments in the global cereals and oilseed markets.
Please note that from now on this commentary will only be updated monthly. To follow developments in cereals and oilseed markets in the meantime, please see the markets section of the website of AHDB Cereals & Oilseeds.
July 2018 Update
Weather continues to be the driving force in grain and oilseed markets this month, both internationally and domestically. In light of current conditions, the AHDB has launched a drought hub to give guidance on how to mitigate the risks of heat stress and drought. Click here for more information…
- EU-28 average wheat yields have been forecast 2.4% below the five-year average, at 5.59t/ha according to the July crop monitoring report from the EU Commission. The most adversely affected EU wheat yields are countries in the Baltics and across northern and northern central Europe. The increasing crop concerns drove UK wheat futures (Nov-18) past the £180.00/t mark on the 24 July, the first time since May 2013. As at 26 July, UK wheat futures (Nov-18) was at £184.50/t.
- On July 12, the USDA slashed its forecast of world wheat supplies and stocks in 2018/19 by 5.3Mt to 260.9Mt in its latest World Agricultural Supply and Demand Estimates (WASDE). The decline has been driven by challenging weather in a number of key exporting countries, including Russia, Australia, the Ukraine and the EU.
- The GB wheat area is estimated at 1.74Mha, a decrease of 2% from 2017 levels, according to AHDB’s 2018 Planting and Variety Survey. The current dry conditions and lower domestic stocks suggest that the 2018/19 domestic supply may be tight once again.
- The GB winter barley area is estimated down 7% on 2017, at 365Kha. Meanwhile, spring barley is estimated at 768Kha, an increase of 4% from 2017 levels.
- Soyabean prices came under significant pressure between late May to mid-July, due to various factors. On the 6 July, the US and China imposed reciprocal tariffs on goods. This includes a 25% tariff on US soyabeans.
- World soyabean stocks in 2018/19 are now forecast to reach a record high of 98.27Mt, according USDA’s July WASDE report. The rise comes from increased stocks projected for the US, Argentina and Brazil. The revised forecast contributed to a fall in Chicago soyabean (Nov-18) futures to close at $306.50/t on 13 July, the lowest price for the contract.
- The oilseed rape area in England and Scotland is estimated to be up 9% on 2017 levels, at 608Kha, according to the AHDB’s Planting and Variety Survey. This is the first OSR area increase for 7 years.
- On July 12, the Association of German Farm Cooperatives cut its winter rapeseed production forecast by 0.5Mt to 3.55 Mt, a 17% decline from 2017 levels. The reduction follows ongoing dry, hot weather.
- Dry weather in key US growing regions has resulted in raised concerns for some soyabean crops. The crops are reaching their critical growth stages, meaning they are particularly sensitive to heat and moisture stress. 70% of soyabean crops were rated as good/excellent in the w/e 22 July, compared with 57% compared to this time last year.
Felicity Rusk, Trainee Analyst