13 Aug 2014
Grain Market UpdateGrain
The USDA in its latest world agricultural supply and demand estimates forecast a record world wheat harvest of 716mt, an increase of 10.9mt on last month. The main increases for production are forecast for Russia +6mt, China +2mt and the Ukraine +1mt. Wheat exports from the EU are forecast to fall by 3mt to 25mt on the back of downgraded milling wheat ending up on the feed market. However, world consumption is also forecast to increase significantly to just shy of 7mt on the back of higher inclusion rates in livestock rations. All in all world wheat carryout stocks for 2014/2015 are forecast to increase by 3.4mt.
On the feed grain front, the USDA forecasts for US corn/maize yields came in below market expectations at 167.4bu/ac while market analysts were predicting yields in excess of 170bu/ac. World feed grain supplies for 2014/15 are seen almost 5mt higher, with the bulk of the increase coming from US and EU (+1.4mt) maize and barley from Former Soviet Union member states (+3.1mt). Feed grain consumption is expected to increase by a further 2.3mt.
For oilseeds the WASDE report forecasts production for 2014/15 at 521.8 million tons, marginally lower than last month. While rapeseed and cottonseed are expected to increase this is expected to be offset by a fall mainly in soybean and sunflower seed production.
Irish dried grain prices are trading a little lower this week with barley trading from €154/t to €156/t compared to €155/t to €160/t last week. Wheat is also a little easier trading from €160/t to €162/t compared to €160/t to €165/t last week. Brokers typically are trying to flush out deals at lower prices especially where they suspect farmers / merchants are hard pressed for cash and immediate movement. However, they are meeting significant resistance from sellers at the current price offers.
Harvest progress has been slow this week as heavy showers and thundery rain across much of the country continues to disrupt harvesting. The winter barley, oats and oilseed rape harvest is well wrapped up at this stage. Barley and oats performed well however, oilseed rape yields were disappointing ranging in yield from 1.1t/ac to 2.2t/ac, averaging around 1.4t/ac. Spring barley yields are variable with yields ranging from 2.4t/ac to 3.65t/ac. There has been significant lodging particularly on spring barley up through the midlands with reports of some wheat crops also going down. It is estimated that about 15% of the malting crop has been cut at this stage with proteins well down on last season. Winter wheat yields are also variable ranging from 3.65t/ac to 4.4t/ac with some exceptional first wheat’s on good ground bordering on 5t/ac. However, reliable reports would suggest yields averaging somewhere from 3.8t/ac to 4.2t/ac over larger areas.