The spell of good weather has allowed farmers to make excellent progress on plantings of winter crops. Based on reports from around the country it would appear that most of the extra plantings will be attributed to barley. However it must be remembered that winter barley was back by over 8000 ha last year so we should see this area restored or perhaps regain the 74,000 ha level of 2016.
The grain prices released from the main coops last week have set the level for current green grain prices. For growers with solely winter crops the price is reasonable however those with spring crops along the eastern seaboard in particular, will be nursing losses again this season. Although trade in grain is quiet at the moment,prices have steadied this week having eased a little last week. Most merchants are offering somewhere in the region of €200-€205 for green wheat and barley. Wheat and barley continues to trade at a significant premium to maize due to the greater availability of maize on world markets. For the 2019 harvest some merchants are reported to be offering prices in the region of €175/t for green barley.
On international markets futures prices on grains and soya jumped sharply earlier in the week at news of a newly negotiated U.S.-Mexico-Canada Agreement (USMCA), a replacement for the North American Free Trade Agreement, offsetting pressure from big supplies and forecasts for a bumper harvest in the US. Prices were further bolstered by worries about a possible suspension of grain loading in two Russian export regions and rains in the US mid-west which would delay the harvest. In general it is encouraging to see that after the decline in futures prices from the August highs they have steadied and found support throughout September. For the first time in 6 years world consumption of wheat and barley has exceeded production and while maize production has not suffered to the same extent an increase in consumption has also sustained prices. Soya futures are still at 10 year lows, however, continuing trade wars and another bumper harvest may ensure that US growers reduce cropping in the coming season.
Meanwhile weather continues to have an effect around the world with Australia recording its driest September on record and the country is expecting its smallest wheat crop in a decade. While in France the autumn drought has severely affected the establishment of the 2019 oilseed rape crop.
Irish merchants are actively canvassing for green grain supplies due limited availability of grain and a reduction in projected yields.
Prices for green barley at between 13% -16% moisture are being quoted at €190 per tonne (ex VAT).
Oats between 13% -16% moisture are being quoted at €180/t (ex VAT).
This mirrors the global picture where indications continue to point to a reduced global grain output in 2018.
World cereal production prospects trimmed and stocks heading sharply lower in 2018/19
Latest indications from the Food and Agriculture Organisation (FAO) continue to point to a reduced global cereal output in 2018. This will lead to negative prospects for the cereal supply outlook for the forthcoming 2018/19 marketing season.
According to the International Grains Council latest grain market report, the total grains supply and demand outlook for 2018/19 has tightened. A 12m t cut for world grains production is due to adverse weather conditions in the EU and Russia and the EU, which has damaged prospects for barley, wheat and maize. Although global consumption is reduced, projected carryover stocks are down by 12m t m/m, with the year-on-year decline now seen at 54m, including a drop of 34m in the major exporters.
Total Grains Supply & Demand Summary – figures in millions of tonnes (m t)
|Major exporters *||150||181||173||139||-19.8%|
(*Argentina, Australia, Canada, EU, Kazakhstan, Russia, Ukraine, USA)
Total grains production in 2018/19 is expected to be a three-year low, as bigger outturns of maize and sorghum only partially compensate for poorer wheat and barley crops. Although total supply will be smaller, consumption is seen reaching a third successive record, with the largest gains for food and industrial uses.
(Source: International Grains Council, Grain Market Report GMR 489 2nd July 2018)