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IFA Grain Committee Chairman Mark Browne said that Irish tillage farmers are furious over the continued failure of many animal feed merchants to use local barley. “Many growers are left with stores full of barley due to the importation of feed ingredients,” he said.

According to figures from Eurostat, Ireland imported 157,000 tonnes of non-EU maize in January alone, with Canada, Ukraine and Russia the main sources of the product. Mark Browne said if even a fraction of these imports was reduced in favour of native Irish barley, it would alleviate the immediate problem.

“It is inexcusable that merchants would ship feed ingredients half way around the world and not buy Irish grain which is on their own doorstep. Farmers are incensed that these non-EU countries, which do not have equivalent standards to Irish grain in relation to sustainability, the environment, GMOs etc., yet they have displaced native barley in livestock rations,” he said.

The IFA Grain Chairman said at this stage it was time to examine the specifics of the sustainability schemes operating across the Irish agriculture sector, in relation to the use of Irish grain.

For instance, Origin Green which is Ireland’s food and drink sustainability programme, proclaims the importance of local sustainable sourcing; reducing the carbon footprint; and serving local communities. Mark Browne questioned if shunning Irish barley in favour of importing maize produced to lower environmental standards, over vast distances, was compatible with the sustainability principles of the programme.

He concluded by emphasising that tillage farmers would not continue to tolerate this undermining of the Irish cereal sector. He called on all stakeholders in the animal feed sector, including the government and Bord Bia, to address the issue immediately by supporting the inclusion of local grain in feed rations.

Domestic Market

Still no change in the domestic market with barley slow to move due to the import of maize and slowing feed demand. Barley that is moving has been sold at up to €190/t and wheat is moving easier at an average of €205/t. The situation is now critical due to the likelihood of a significant carryover of barley into the next harvest. Figures from Eurostat indicate that 156.000 tonnes of maize from non-EU sources were imported into Ireland this January alone. Canada, Russia and the Ukraine were the main sources for this maize which indicates that it went into the animal feed sector. This level of importation, when Irish barley is readily available is unacceptable and is posing serious questions for Ireland’s brand image particularly in relation to Origin Green. The latest green prices for green barley and wheat for 2019 harvest are €145/t and €155/t respectively.

Native/Import Dried Prices

Spot 10/04/19 April – Jun 2019 New Crop 2019
Wheat €203 – €206/t + €1/t per month €183-185
Barley €184 – €187/t + €1/t per month €173-175
FOB Creil Malting Barley €186/t July 2019
Oats €225
OSR €365 €370
Maize (Import) €180 €177 €177
Soya (Import) €330 €330

International Markets

Wheat markets were under pressure over the past number of days due to favourable crop reports and high ending stocks. Yesterday the USDA raised its estimate of US and world wheat supplies following poor export demand and a good harvest in Argentina. The monthly report upped its forecast of global 2018/19 wheat ending stocks to 275.61 million tonnes, topping the highest in a range of trade expectations. The report also indicated that the Winter wheat crop was now in an improved condition from the previous report. European markets although under pressure, have fared better as the strong export trade continues, helped by the weaker euro and the reduction in Russian exports.EU soft wheat exports are down only 4% on the previous year compared with 25% in February. Recent figures from France indicate that the barley acreage will increase by 17% this year which is up 3% on the 5 year average. This is related to the reduction in sugar beet which is down 6% and Rapeseed at 18% on last year’s plantings.

Corn (Maize) has come under renewed pressure as the USDA report indicated that carryover stocks in the US could remain high due to falling export, feed and ethanol demand. However, futures prices continue to receive support due to the potential of US/China trade talks and forecasts of further wet and cold weather for the main cropping states of the US Midwest.

The soybean market remains focused on the US/China talks and continue to trade in a narrow range which are at historic lows. In relation to rapeseed, French and German farmers have been forced to plough in 18,000 ha’s of the crop due to the presence of an unauthorised GM variety found in imported seed. This is ironic considering that the EU import millions of tonnes of GMO crops every year.

 

 

There is no change in the domestic market with barley still slow to move due to the import of cheaper maize. This situation is really unacceptable considering we have had one of our lowest barley harvests on record. On the other hand, there is good demand for wheat as it is more difficult to substitute in rations. The Malting barley pricing structure for harvest 2019 will be based on the French FOB Creil for Planet barley which has remained at the recent highs of €189/t.

Native/Import Dried Prices

Spot 02/04/19 April – Jun 2019 New Crop 2019
Wheat €203 – €206/t + €1/t per month €183-185
Barley €185 – €187/t + €1/t per month €173-175
FOB Creil Malting Barley €189/t July 2019
Oats €225
OSR €365 €370
Maize (Import) €180 €177 €177
Soya (Import) €330 €330

Corn (Maize) futures fell by up to 4% last Friday after the latest USDA survey revealed that 92.8m acres of the crop will be planted in the US this season. This figure is up 3m acres from last year and is up 1.5m acres from a previous survey of farmers. The rise in planted area far outweighed the 3% fall in corn stocks, which analysts had expected to be larger. On a positive note corn futures have made a comeback since Monday as traders considered that the planting survey was undertaken before the vast flooding occurred in the US Midwest, which could affect timings and decisions regarding planting of the crop.

Meanwhile wheat futures also fell in tandem with corn, but not to the same extent. In its first crop condition report of the year, the USDA said that US Winter wheat crops are in good condition and this has also added some bearish sentiment to the US futures market in particular. The Matif wheat in France has fared better as the weaker euro and talk of dry conditions in some European regions stabilised the market.

Soybean futures have largely flatlined as stock levels reported by the USDA are currently at record levels for the start of the planting season. In addition, if wet weather in the US delays corn planting than this land may well switch to later planted soybean, therefore increasing supply. On the bullish side, prices continue to be supported by news of continuing exports to China but volumes are still well below levels from recent years.

 

On the domestic front demand for feed is beginning to edge lower following the jump in demand over the past three weeks. Farmers and merchants are struggling to move barley however there is some demand for the smaller quantities of wheat remaining in store. As we approach April there is now a real worry that if barley does not regain some of the market share lost to imported maize, we could have an overhang going into next harvest. Forward prices for green barley next harvest are around €147/t for green barley and €157t for wheat.

Native/Import Dried Prices

Spot 25/03/19 April – Jun 2019 New Crop 2019
Wheat €205 – €207/t + €1/t per month €185
Barley €185 – €190/t + €1/t per month €175
Oats €225
OSR €380 €378
Maize (Import) €180 €180 €180
Soya (Import) €328 €330-335

Grain markets have seen a significant turnaround in the past two weeks with CBOT prices for wheat regaining 11% while the Matif is up almost 6%. A number of factors have contributed to the market rise namely traders buying for short cover, increased international demand for French wheat and the record flooding in the mid-western grain belt of the US mainly in Iowa and Nebraska. Early estimates of lost crops and livestock are approaching $1 billion in Nebraska alone. There is some concern that sowing of the Spring wheat crop will also be delayed in North Dakota due to snow cover.

 

On the barley front some news regarding a 730,000-tonne purchase by Saudi Arabia grain buyer SAGO and a rare purchase by China of a load of French barley has created some optimism as both countries have been out of the market for some time. The FOB Creil for malting barley has come off its recent low of €180/t and is now trading at €188/t. This is due to the reduction in old season stock and the prediction that plantings of Spring barley will be down in France and Germany which is where most of the malt barley is sourced as opposed from Winter crop.

Corn/Maize futures jumped to their highest level in 3 weeks on reports about flooded stores and delayed planting in the US Midwest which stoked buying and fund short-covering. Growers in this area had been planning to switch some land from soybean to corn but this may now change. It was also confirmed that China had purchased 300,000 tonnes of US corn, its largest purchase in more than 5 years.

The soybean market has been fairly stagnant over the past two weeks as the market continues to wait for news on Chinese/US trade talks. On Friday the USDA will release their quarterly grain stocks report along with prospective plantings so this may give some direction to the market.

In other news the EU Commission recently published its criteria for determining what crops cause environmental harm, as part of a new EU law to boost the share of renewable energy to 32 percent by 2030 and determine what are appropriate renewable sources. It has singled out palm oil for removal from transport fuel by 2030 due to its association with deforestation in south east Asia.

IFA Grain Committee Chairman Mark Browne has said the decision by the EU Commission and endorsed by the Member States not to renew Chlorothalonil is a severe blow for the Irish tillage sector.

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