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IFA Grain Chairman Mark Browne said the next Government has to fight for an increased CAP budget to take account of inflation and to compensate farmers for any additional requirements placed on them as a result of this CAP reform.

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IFA National Grain Chairman Mark Browne has welcomed the decision by DAFM and the EU Commission to grant a derogation on the 3-Crop Rule.

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Domestic Market

Demand continues to struggle in the feed market. Adequate fodder supplies, combined with a reduction in demand from beef finishers, has had a negative effect on the feed sector. In this scenario suppliers are finding it difficult to move barley, however, wheat supply has tightened considerably. We now see a gap of up to €30/t between the spot price of barley and wheat. Not surprisingly imports of maize up to December were down almost 35% compared to the same 5-month period last season. On a positive note, with barley now trading at such a discount to wheat and maize, it is now beginning to buy back demand in the market.

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Domestic Market

Demand continues to remain strong in the feed market, however with competition from imported maize and other feed ingredients, the market remains very competitive for native grains. Due to the higher domestic supply of barley this season the gap between spot wheat and barley has moved up to €20/t.

Due to the limited amount of planting and poor prices there has been little interest in forward selling. In relation to malting barley, Boor malt recently have offered a forward sell of €180/t for green crop next harvest.

Irish Native / Import Dried Prices

Spot €/t Jan 2020 €/t
Wheat 192   194
Barley 172 175
Oats 160
OSR 378
Maize (Import) 185 188
Soya (Import) 340 338

International Markets

The big news in the market has been the agreement of a phase one deal between China and the US after their protracted trade war. There is no concrete information on the exact details of the deal however the US are saying that China is projected to import $32 billion of US agricultural products per annum in the next two years which would be significantly above its previous high of $24 billion in 2017.

Chicago wheat futures jumped dramatically on the news while the Motif March contract jumped to a high of €187/t. News that the new Argentine government has increased export taxes on grains and soybeans by approx. 5%, has also contributed to the recent bullish sentiment.

These recent news events have come against a background where potential wheat production is seen as being reduced in Northwest Europe due to wet sowing conditions, and in Eastern Europe/Ukraine due to excessively dry planting conditions.

In its first sowing estimates for 2020, the French Farm Ministry estimates the country’s winter soft wheat area for the harvest at 4.73 million hectares, down 4.8% compared with this year. This figure is 5.6% below the average of the past five years. Reports from Germany suggest that the winter wheat sown area for the 2020 harvest has been reduced by 7.1% from 2019.

Domestic Market

The continuation of the wet conditions throughout November, has ensured there were few further opportunities to plant Winter crops. Some areas in the East and South east have received up to twice the annual rainfall for October and November which will lead to loses in the crops which were planted. This will have significant implications for the availability of wheaten straw in particular next harvest. Many are now considering planting Winter wheat in January/February if conditions allow.

According to Eurostat figures, Ireland has imported 255,000 tonnes of Maize from third countries outside the EU since the marketing season started in July. The majority of the imports were GM maize from Brazil. This figure is 82,000 tonnes down from the same period last year however, it is still a huge figure considering the favourable domestic grass growing season and extra availability of native grains.

There have been some forward prices offered for green barley at €140/t, however, with the price on the low side and the lack of Winter barley plantings, few will be considering these offers for the moment.

Irish Native / Import Dried Prices

Spot €/t Jan 2020 €/t
Wheat 186/188   189
Barley 172 175
Oats 160
OSR 370
Maize (Import) 182 185
Soya (Import) 335 335

International Markets

The Dec 2019 Matif wheat contract, is now trading at €186/t, a major change from the low of €165/t during September. This increase in the futures price has been driven by the reduced Winter plantings in the UK and France as a result of the wet weather experienced in North western Europe. Chicago wheat futures have also jumped in tandem with European prices however some of this is being attributed to technical moves and covering of short positions.

Black sea wheat prices remain strong however Russian wheat production is up 7 million tonnes on last year and they also have increased their Winter cropping area by 4% compared to 2019.This may more than account for the potential reduction in the EU planted area, and may cancel out the potential reduction in the European area.

With the greater potential for EU wheat production being reduced compared to barley, we are seeing some divergence in the market between wheat and barley. The market is assuming that framers will plant more Spring barley crops in 2020 in order to compensate for the inability to plant wheat etc.

Corn (Maize) futures rose in tandem with wheat towards the end of last week as sales of US corn increased and snowfall in the north mid-west of the US is causing problems with finishing the corn harvest. Increased internal demand in Brazil from ethanol and livestock producers has also being positive for future prices.

Rapeseed futures continue to remain robust however soybean prices have fallen significantly in the past week due to continued uncertainty in US/China trade talks, and the potential for increased production from south America in 2020. The EU continues to be over dependent on imported protein crops with the block increasing soymeal imports by 15% compared to last year.


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