Grain Market Update
Spring planting is now in full swing with good progress being made throughout the country. There were 170,000 ha of Spring crops planted last year, however, this was only to compensate for the lack of Winter plantings. A combination of good weather and stronger forward prices might see Spring plantings reach 125,000 ha this year which, would see the overall main cereal plantings breach the 270,000ha figure.
Local supplies of feed wheat and barley have become very scarce which will ensure little carryover at the harvest. Now is an ideal opportunity for livestock producers and the Irish animal feed industry to secure supplies of Irish grain for next harvest. The feed sector needs to prioritise the use of native grain, to reduce its overdependence on imported grains from non – EU countries such as Brazil.
Forward green prices for barley harvest 2021 have weakened slightly, however, when compared to this time last year they are €16/t higher for barley and €10/t for wheat. In relation to maize and soymeal, forward prices for next Autumn have again strengthened for maize while soymeal has stabilised.
November rapeseed prices have taken a jump again to €425/t.
The FOB Creil July 2021 malting barley price, is trading above €210/t, however with China requiring 3.5mt of malting barley this season and Australia still out of the picture, the market should remain robust. The pricing tracker for those supplying Boortmalt will kick in on the 15th of April and will run until September 23rd.
Irish Native / Import Dried Feed Prices 31/03/2021
|Spot €/t||Nov 2021 €/t|
|FOB Creil Malting Barley||212|
Matif wheat front month prices have weakened to €208/t while December is down to €196/t. Crops in Europe are reported to be doing well with much of the Spring planting now completed. The Black sea areas are just beginning Spring planting but Winter crops are reported to be looking well, particularly in the Ukraine.
The latest stocks and planting report released by the USDA yesterday, certainly surprised the market, causing a severe spike in spot prices for the main commodities. Stocks of maize were lower than expected but, the real news in the report, was the underestimation in the predictions for new crop plantings of maize and soya. There will be further updates in June, but if plantings remain below expectations it will leave the world supply/demand situation for both these commodities extremely tight.
The delay in the planting of the Safrinha maize crop in Brazil has been Safina compounded by dry conditions. This, along with news that the area of Ukrainian maize plantings could decline by 14% on last year is adding to the bullish sentiment in the corn market.
Production of oil seed rape in the EU/UK is predicted to increase by 1m tonnes to 17m this season. However, this will do little to offset the 6m import requirement of the region. The OSR market remains very strong going forward, however, the ultimate fate of prices will be dictated by production figures from the main exporting countries namely Australia, Ukraine and Canada.
Activity since last National Council
- The details of the Straw Incorporation Measure (SIM) were recently released by DAFM. The request for the inclusion of rape straw and the provision for sub parcels as requested by IFA were included in the scheme.
- There are ongoing meetings with DAFM in relation to the next CAP. The Pillar 1 issues of convergence and eco schemes are currently being discussed. The grain committee are objecting to eco schemes being used as another form of convergence.
- There are ongoing discussions with Boortmalt regarding intakes and exact contract requirements this season. Online meetings were held with the merchants who have increased contracts with growers this season.
- A meeting was held with the Pest Control Division of DAFM to discuss access to PPP’s, emergency derogations, Farm to Fork etc.
- IFA recently met with officials from the DAFM TAMS section. Equipment reference costs, new additional scheme items, ranking criteria and TAMS post 2023 were discussed.
- There were further meetings of the IFA grain and malting barley committees
- An IFA grain meeting was held for growers in County Laois.
- Markets outlook, CAP Trialogue negotiations, PPP’s and high fertiliser prices were discussed.
- The new CAP is now at a critical stage, with the Trialogues between the EU Council, Commission and Parliament continuing. The grain committee will continue to watch developments and lobby for a positive outcome for the tillage sector particularly in relation to convergence, eco schemes and GAECS.
- Another meeting with Valeo Foods will be held regarding the use of Irish Milling wheat in local flour production.
- There will be a meeting between the ISTA and IFA.
- Covid 19 continues to have an impact on the malting barley sector. IFA will continue to raise the issue with government regarding the knock-on effect from the restrictions imposed on the hospitality sector.
- The campaign will continue regarding the absence of a level playing field in relation to third country feed imports particularly maize. The lower carbon footprint of native cereals and the tillage sector in general will be promoted.
|Mark Browne |
|Patrick Farrell |
Senior Policy Executive