Grain price: Rise continues; low supply a cause for concern

Grain price is continuing to rise. Farmers are producing lower-yielding crops than the average due to this year’s extreme weather conditions.

However, those lower yields across Europe – and worldwide – will make it more difficult to source grain at a reasonable distance.

Damage to European cereal crops in countries like Germany and Poland – as well as Scandinavian crops – will leave Ireland with further to travel for grain in the coming year.

The German winter barley crop is estimated to be back by 18%. French barley production is being held as the great white hope on the continent, as production looks to be least hit.

Some forecasters estimate French production to be unchanged, while others are predicting a decrease of approximately one million tonnes.

The UK expects to be well down on cereal production; this is our main source of feed grain. After the UK, countries like Denmark and Sweden are another port of call for Irish traders, but stocks are low here too.

Some commentators are predicting a 500,000t drop in malting barley production across Europe this season.

This is reflected in the price in the UK, where malting barley is at a £50/t premium to feed barley.

Carry over stocks in other countries, such as Russia and the Ukraine, will be in high-demand. Meanwhile, dry conditions in the US look set to affect maize yields. Large corn producing states like Kansas, Michigan and Wisconsin are among those affected.

LIFFE

LIFFE wheat hit £187/t (€210.41/t) on Wednesday (July 25). This is £10/t (€11.25/t) higher than where it started on Monday (July 23). On Thursday (July 26), that price had fallen back to £184.55/t (€207.65/t) and hit £183.30/t (€205.55/t) on Friday evening.

MATIF

The MATIF price for December broke the €200/t mark this week. On Wednesday (July 25), the MATIF stood at €202.50/t. This is an increase of €15/t on the week before. This slumped to €200.75/t on Thursday (July 25) and dropped to €199.75/t at close of business on Friday.

This bodes well for Boortmalt suppliers, as this is the first time the malting barley price went over the €200/t mark since 2012.

CBOT

Similar to both the LIFFE and the MATIF, it was Wednesday (July 25) when CBOT (Chicago Board of Trade) wheat (September) hit its high for the week. It notched up to 542.75c/bu (€171.27/t).

The price stood at 536.50c/bu (€169.37/t) at close of play on Thursday (July 26) and dropped back to 530c/bu (€166.84/t) on Friday (July 27) evening. The last time it sat over 530c/bu (€167.16/t) was June 11, when it was 534.50c/bu (€168.74/t).