The place is the worth cap for brand new crop wheat? Cereal market each day
As we glance to 2021/22 we’re set for a 12 months of tight UK provide and demand. As we reported with the discharge of the steadiness sheet, we’re nonetheless set for a slight deficit as soon as the 2020/21 exports are factored in.
The world sown to wheat within the UK is proven within the Early Hen Survey at 1.78Mha, near common. Making use of a median yield (besides 2020), 8.4 t / ha, to this zone would permit the manufacturing to be fastened at 14.9 Mt. If we use a quarterly common over 5 years (besides 2020 and 2019) of 8.0 t / ha, manufacturing would attain 14.2 Mt.
With the introduction of E10, we’ll doubtless be able the place we’ll must import subsequent season to steadiness the market. Which means the worth of imports will play an vital function in setting grain costs within the UK, because it has completed this season.
British feed wheat delivered to North Humberside (21 November) was listed on Friday at £ 179.00 / t. We are able to have a look at the worldwide FoB values, making use of freight, port expenses and transportation to offer an concept of the home value cap.
As at all times, the grain of the Black Sea will doubtless be the important thing. In a current report from Refinitiv, Ukrainian corn was valued at $ 206.00 / t – $ 209.00 / t for October / November shipments. Making use of the costs talked about above ends in a value of £ 196.01 / t for Ukrainian maize delivered to North Humberside. Because it stands, that is the cap on the worth of home grains as we transfer in the direction of import parity for brand new crops.
Even when ethanol factories use British wheat, the small market would imply that feed producers would doubtless flip to cheaper origin imports to satisfy their demand. With this in thoughts, we should intently monitor the progress of maize planting in Brazil, the US and the Black Sea.
New crop maize engines
Maize planting in Brazil (Safrinha crop) was 31.6 p.c full as of February 26, 31.2 share factors behind the identical interval final 12 months. In the meantime, the US is anticipated to seed 37.2Mha of corn, the very best degree since 2016. Planting of the US crop will start in April.
Ukrainian maize planting can be anticipated to start out in April. UkrAgroConsult’s margin knowledge means that the enchantment of corn has declined in favor of soybeans. The Black Sea climate will stay a key level of surveillance, particularly given the present chilly situations in Ukraine.