The glorious 12th of August is not just about grouse, this year, its about American maize as well. That’s the date when we should know the truth, as the USDA/NASS re-survey reveals just how many acres of maize were actually planted in the USA, and the percentage of prevent to plant set-a-side that was erroneously included, in the total overstated end of June stocks and acreage report.
Meanwhile on 4 June the USDA acknowledged the potential effect of low water tables and hot weather in Eastern Europe and Russia, with a reduction of 3.8 million tonnes of Russian wheat and one million of Ukrainian. Even the Russians have accepted that they won’t get the record wheat crop of about 85 million they had last year. Some are saying it could be as low as 68 to 72/74 million tonnes. This is encouraging for the UK, and as I said before, the price of wheat in Russia, and the Black Sea dictates the value of UK exported wheat, while the UK is competitive with Black Sea wheat at origination, it’s not so at the country of consumption, because of geography.
I have just returned from France where the harvest has been unchecked with fine weather in July, wheat yields are big, but the protein is lower in some milling wheat. In Germany I saw spring barley being cut at 10% moisture, but still with good grain size and again low protein. Despite the lack of rain in June/July, spring barley was still achieving six tonnes per hectare, with probably 10% of yield lost from grain fill because of the dry weather.
As I write this on 19 July, the UK wheat and barley crop looks full of potential for a better than average crop. In fact the weather has been too good to be true. Personally my fear is a rain affected August, when all the spring malting barley is ripe! Because of the constraints of Brexit, and the size of the spring malting barley crop, I have taken the unusual step of selling as many boats as possible of export malting barley for shipment in September and October. I usually ship in Oct/Nov/Dec combined! So, whatever you do, if your malting barley and milling wheat is ripe at the same time, please cut the barley first. The malting premium will be worth more than the milling.
The first winter malting samples in the South show good grain size and nitrogen, and yields are better than average, so far so good.
The last USDA report was not as negative as feared on wheat. Like wheat, feed barley is well over supplied globally. In the UK we will have at least one million tonnes of exportable surplus. But, maize may be the saviour of barley and in most places maize is now more expensive. Without waiting for the 12 August USDA re-vamp, some end users are now buying barley instead of maize. So inclusion rates in animal feed will increase, and the differential between feed barley and wheat is narrowing – it has been as large as £20 per tonne.
In France I saw irrigated maize which looked ok, but without irrigation it looked very poor, so it may not just be the USA that has a problem with its corn. Incidentally the malting premium in the UK and EU has decreased – as the winters have shown good quality – but feed barley is holding its price for now.
For the past six months I have been advising oilseed rape growers not to sell forward. The first cuts in the south, suggest this has been correct, with 1 to 1.3 tonnes per acre recorded so far. The market has now risen some £20 per tonne, which it should. So when you have it in the barn – a forward value of around £355/£360 including oil bonus, maybe worth considering.
But, we must not get carried away. The world is awash with wheat and barley. The UK will have sizeable surpluses that require regular exports, even if we didn’t have the Brexit problem. So when you know you have the barley and wheat, keep selling what you need to for space and cash flow. It may be that your next sales are the unexpected extra yield that you cannot get in the barn – so the value is almost irrelevant. Let’s hope for a price spike after 12 August, but sell into it, even if it’s on £5 per tonne.