Crisp Malting Group Harvest 2018 Update

Introduction

With no break in the long hot and dry weather that has dominated the weather pattern over NW Europe since early May, it is not surprising to report an early start to harvest of winter barley and oilseed rape in UK. Widespread concerns about the spring barley crop throughout the EU have been further exacerbated over the past few weeks.

Crop Prospects UK

Harvesting of winter barley started in the last few days of June and was in full swing throughout England last week. Despite the current weather conditions, most reports of both yield and quality are favourable (i.e.better than expectations of many pundits!). Malting barley grain nitrogens are in general low, with most samples through our laboratories being 1.65% or less. Grain size is variable and in general smaller than the 5 year average, with a wide range (65-95%) in barley over the 2.5mm sieve. It will be another 10 days before a full analysis of the winter crop can be made; but a few pointers can be gleaned from our own results and others reported across the country: Maris Otter performing relatively well, particularly on chalk soils, all Flagon samples seen so far are useable, Venture suffering another year of poor screenings and Craft producing the best samples in terms of grain size.

Markets

EU wheat markets remain well supported as a series of reports from around the world continue to reduce the potential wheat harvests across Europe and Russia. Significantly in the UK, the likelihood of the country needing to import substantial quantities of wheat (assuming continued bio-ethanol demand) has pushed UK feed wheat futures above French milling wheat futures prices! Whilst the weather has limited the potential of the winter sown crops, it is having a devastating effect on the potential of spring sown crops and in particular malting barley in NW Europe. Yield reductions of over 50% are talked about for many Scandinavian and north German crops, whilst further east and in UK there will be a significant reduction in output. Further compounding the yield issue will be the grain quality, with high or very high grain nitrogen levels likely in all of the drought-affected areas. The consequence of this will be a further sharp movement upwards in malting barley prices as traders in particular scramble to cover their short positions and first-hand sellers enter the market attempting to buy back some of their sales. EU spring barley prices have now risen €40 (£35) since the start of May. Actual trading prices for UK winter malting barley are few to date and it will be late this week before a ‘real’ market develops, but with spring barley valued in excess of £200 in forward markets and more demand than supply, winter prices are unlikely to be at a significant discount, particularly low nitrogen and screening samples.

  08/06/18 13/07/18 Difference
Nov Wheat Futures £161.50 £169.50 +£8.00
Oct FOB Spring Barley €202 / £177.98 €226 / £200.00 +£22.02

 

Written by Bob King

Commercial Director

Leave a Reply

Your email address will not be published. Required fields are marked *