Grain price: Wheat increasing all week

Grain price continued to rise this week. This is on the back of severe drought and lower yields in some of the main growing regions.

The USDA (United States Department of Agriculture) stocks and acreage reports show that stocks of old crop wheat are down 7%, while corn and soybean stocks are up (1% and 26% respectively) in the US.

Wheat acreage in the US stands at 47.8 million acres this year – up from 46.1 million acres in 2017.

Wheat harvest is complete in Arkansas and 50%, or more, of the wheat harvest is complete in 10 of the 18 states monitored in the report.

Meanwhile, the majority of US corn is reported to be in “good” condition, according to US crop reports. However, high temperatures during ‘silking’ may not bode well for kernel formation later on in the season.

According to the Kansas wheat harvest report, yields are down in the state, but quality is up.

The wheat harvest has begun in Russia and the Ukraine. Early reports are variable, but yields are not expected to break any records. Some reports from Russia state that the harvest is seven-to-13 days earlier than last year. The same reports are estimating yields to be back 25% or to be similar to last year.

Only time will tell how the world prices will be affected by the continuing drought conditions in many countries.

EU cereals and oilseeds production is expected to be back 6% this season, according to estimates from Copa Cogeca (European organisation representing farmers).

Drought is affecting northern Europe and wheat yields in France and Germany are predicted to be hit badly.

LIFFE

LIFFE wheat (November) climbed from £163/t (€184.31/t) last Friday (June 29) to £166.65/t (€188.44/t) on Monday. By Thursday (July 5), that price hit £171.75/t (€194.20/t) and at close of business on Friday (July 6), it stood at £171.90/t (€194.33/t).

MATIF

Having finished at €181.75/t on Friday (June 29), the MATIF hit €183.50/t on Monday (July 2) and steadily made it to €189.75/t on Thursday (July 5). Close of business on Friday saw the MATIF drop slightly to €188.25/t.

This bodes well with Boortmalt growers here in Ireland; their grain price is based off of the MATIF wheat price for December. This week saw a new deal made between the IFA and Boortmalt on malting barley price.

Under the new structure, farmers will be paid €10/t on top of the December 2018 MATIF price – up to €180/t. Once the MATIF goes over €190/t, growers will be paid the MATIF price.

CBOT

Chicago Board of Trade (CBOT) prices remain behind as a result of the continuing trade war and the impact of tariffs from China. Despite this September wheat climbed almost 35c/bu last week. The CBOT price stood at 480.25c/bu (€150.62/t) on Monday (July 2).

It hit 491c/bu (€154.07/t) on Tuesday and Wednesday (July 3 and 4) and hit 505.50c/bu (€158.47/t) on Thursday (July 5). On Friday (July 6), CBOT wheat had increased to 515c/bu (€160.99/t) by the afternoon.