Crop 2018 June Update by Bob King

Introduction

With the commencement of harvest in Southern Europe fast approaching, markets for all grains and oilseeds are in bullish mode as a combination of weather factors around the world appear to be heralding a move to tighter world grain stocks after several years of good harvests and growing stocks. At a global level concerns about lack of rainfall in parts of North America, Russia and Eastern Europe have pushed up wheat prices to 4 year highs, bringing corn, barley and other grains up as well. Within Europe, a prolonged hot dry period in Scandinavia and the Baltic area, with no rain on the horizon, has caused malting barley markets to move sharply upwards in recent days, this despite EU spring barley plantings being higher than last year due to a wet autumn 2017 curtailing winter plantings, particularly in Denmark and Sweden.

Crop Prospects UK

UK barley plantings are forecast to be higher than 2017, with a reduction in winter (feed) plantings more than offset by a large increase in spring plantings (but perhaps not as large as the Early-Bird Survey (EBS) estimated), particularly in Scotland following a very wet autumn. Planting of winter malting barley took place in good conditions and crops in Eastern and Southern England have developed well and have good potential for both yield and quality. In the winter crop the area of both Maris Otter and Flagon is up on 2017 whilst the MBC Full Approval variety Craft has a significant area, mainly at the expense of Venture and Talisman. Although there is a significant increase in spring barley plantings, this may not lead to an increase in production, as plantings were in general much later than normal with significant plantings as late as 1st week May. The good news is that these late planted crops have developed quickly and have benefited from reasonable levels of rainfall (except in Scotland) and above average temperatures and sunlight hours during May; continued intermittent rainfall over the next 6 weeks is probably required to ensure good quality even if yields are unlikely to be any better than the 5 year average. For Scotland rainfall is a bit more imperative.

‘000 hectares Defra Crop 2017 EBS Survey 2018 % change
Wheat 1792 1748 -2%
Winter Barley 423 382 -10%
Spring Barley 754 804 +7%

Certified seed statistics infer the following varietal splits for the coming crop:

Winter England % Spring England % Spring Scotland %
Craft 4.0 Concerto 5.7 Concerto 33.6
Flagon 4.6 Irina 6.6 Irina 1.4
Maris Otter 4.6 Laureate 11.7 Laureate 21.0
Venture 7.7 Planet 28.9 Planet 6.1
Propino 25.9 Propino 6.7
Other Malting 1.8 Other Malting 10.7 Other Malting 16.2
Feed 77.3 Feed 10.5 Feed 15.0

Markets

With the underlying strength of the wheat, corn and feed barley markets, current market values for malting barley infer higher harvest and forward malting barley prices about £20 above this time last year. Whether we are in the midst of a price spike caused by the weather prospects or if today’s price levels prevail through the North American and European harvest period, we will have to wait and see.

09/06/17 08/06/18 Difference
Nov Wheat Futures £142.00 £161.50 +£19.50
Oct FOB Spring Barley €178 / £156.83 €202 / £177.98 +£21.14

 

 

Bob King

8th June 2018

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