Wynnstay Humphrey Feeds & Pullets

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Weekly Commodity Report 3rd November 2019

The quiet spell in UK soft commodities continued during last week.  It has been a while since we had a week with so little price movement.

Possibly the country is taking a `reflective moment’ after the Brexit extension to relax, or at least focus on who will be running the country rather than what will happen after the ‘flextension’.  The Nov 19 contract is almost completed and static at £138.50/T.  Wheat due to be harvested in 2020 is lifting as wet weather is delaying drilling.  If the poor planting continues, yields will drop in the new crop and this has started to firm prices for new crop contract, which in turn is pulling up old crop (harvest 2019) prices.  The May 20/Nov 20 spread has inverted and continues to widen.  The Nov20 wheat contract finished the week 152.50/T.  It had been thought that with the extension on the Brexit, the deadline for exports would be at priority before the end of the year, but with the price up, the UK is currently less competitive – so what will happen to the surplus not exported by the time of any eventual export?  It is also worth noting that many of the end of year contracts have already been filled prior to the change in the deadline limiting the market further.

The weather concerns affecting the UK also extend to the EU Matif Milling wheat contract, which is trading in a tight range, and generally tracking sideways.  France and Germany are reporting delays in planting, but concern is lower, as a dry spell would allow farmers to catch up.

The Ukraine has seen increases in its grain exports by almost 40% at 17.9 Mln T in the 2019/20 season with the gain mostly from wheat, which increased by 3.5 Mln T.  Australia continues with weather struggles and dropped its wheat crop by 2 Mln T to 16 Mln T while Argentina also sited unfavourable weather as its reason for cutting 1 Mln T from its 19/20 wheat estimate.  Egypt remains active wheat buyers, despite claiming to hold enough stock for nearly 5 months.

Rains in Argentina may be too late for the wheat, but they will assist the development of the soya bean crop.  South American soya beans remain under pressure as the weather improves.  The US market remains held in harvest pressure as the trade seem to maintain their lack of trust in the rumours that a trade deal is likely between the US and China, which could bring an end to tariffs that have plagued the US.  China are reported to be seeing a small increase in feed demand and require more soya.  Despite a 40% cut in the hog herd in China, the increased finished weights are demanding feed along with an increase in alternative meats such as poultry.  Soya crush margins are up in China. 

Soya supplies to Brazilian ports is low, so there may be a short window before its new crop is harvested for the US to take advantage of some purchases and ship some of their surplus sales still on the US books.  In Argentina the rejection of the Marcri government and return to the Peronist regime is concerning farmers, who fear the imposition of export and currency controls and memories of past years where soya beans were hoarded.

One Suffolk artist has taken the “100 drawings in 100 days” challenge for a cause all of us at Humphrey Feeds support.  Katie Batchelor completed the sketches of farming scenes around Norfolk and Suffolk to raise money to support the mental health of farmers.

From Cattle to Game birds, daily tasks, to the happy pig of day 100 there is something for everyone.  We especially like the busy free ranging hens.  The Drawings will be sold at an exhibition at the Norfolk Showground this month.  A percentage of the money raised will go to YANA (You Are Not Alone) which works to support the farming community in times of stress.

So, if you have an empty place on your wall or perhaps you need some Christmas gift ideas why not take a look.

http://www.kate-batchelor.co.uk/yana-100-drawings-in-100-days/

https://www.yanahelp.org/

Brought to you by Melanie Blake and Martin Humphrey