Grain price: ‘Consumption exceeding production for the first time since 2012’

One take-home message that stuck with AgriLand on the way back from the Cereals 2018 event in the UK this week was a comment from a grain trading analyst, who said: “Consumption is exceeding production for the first time since 2012.”

As Irish farmers worry about potential crop yields, particularly in spring crops, it is the world market that will affect the price in this country. On this, weather continues to pose a risk to grain yields in Russia and the Ukraine.

Australia – the world’s fourth largest exporter of wheat – is also in need of rain; its wheat harvest is expected to be down by 1.8 million tonnes for the 2018/2019 season.

While it is still early in the season to predict yield, total production looks like it will be affected by this weather.

Harvesting is well underway in the US, as combines roll in places like Illinois and Kansas; a better picture will become clearer as this moves on. However, the USDA (United States Department of Agriculture) forecasts that Kansas wheat production will be down 19% from 2017.

LIFFE

LIFFE wheat (November price) reached a high of £161.40/t (€184.84/t) on June 12. Otherwise it was moving at, or slightly under, £160.60/t (€183.93/t) from June 7 to June 13. It went down to £159.35/t (€182.49/t) on June 14 and fell to £157.75/t (€179.95/t) on Friday (June 15) evening.

Meanwhile, at the Cereals 2018 event in the UK this week, traders were mentioning spot prices of £151-155/t (€173-€177.50/t) ex-farm in the midlands and south of Britain; further north in Yorkshire, £170/t (€194.70/t) was being quoted for November wheat (ex-farm).

The advice from traders in the UK was also to hold off on sales and “not to be bullish”.

MATIF

MATIF wheat for December peaked at €187/t at close of play on June 12. This was up from €186/t on June 7 and €184.75/t on June 11. However, this price went back down to €184.25/t on Wednesday (June 13); it hit €184/t on Thursday and by Friday evening was at €181.75/t.

CBOT

Chicago Board of Trade (CBOT) July wheat rose dramatically on June 12 from 514.50c/bushel (€163.07/t) on June 11 to 534.50c/bushel (€169.41/t).

However, it also fell dramatically by 18c/bushel on June 13 to 516c/bushel (€163.55/t). It had fallen a further 15.5c/bushel to 501.5c/bushel (€158.95/t) by close of business on Thursday night, while it dropped to 499c/bushel (€157.77/t) by Friday evening (June 15).