Like in 2019, the current UK drilling issues have taken UK LIFFE price above MATIF. Indeed, LIFFE Nov24 is trading £5 above MATIF Dec24. In other words, market has done its job and UK new crop wheat will not need to rise anymore when compared to world prices. The UK old crop wheat is trading just £5 under MATIF. This should also slow or even strop UK exports. In fact the UK has now become a net importing nation. The UK wheat needs to stay in the country until at least June 2025! That also means that from now on, LIFFE will be fully correlated to MATIF.
115 ships have exported 3.4MT of grain & oilseeds since the beginning of the Temporary Corridor in August. In just 2 weeks time, a new insurance scheme will allow to fully cover all the war risks and lower logistic costs. We consider that if Ukraine manages to export 2MT per month via Odesa, on top of 1MT via land and 2.5MT via Danube ports, it will be enough to cover their 2023/24 export surplus. Even if we can expect Russia will continue to target vessels and port infrastructures, it is bearish for world grain prices.
FranceAgriMer reported French soft wheat planting at 71% complete, up only 4% from last week due to continued heavy rains and behind 96% at this point last year; condition ratings fell five points to 86% good/excellent, down from 98% last season. With normal conditions, French wheat planting usually advance 20% per week! We shall expect a lower winter wheat area in France too as it was a wet week again and there is more in the forecast…
The soymeal market is facing what we call a market squeeze: supplies do not meet an unflexible demand. As a result, near term meal prices have reached another season high yesterday. We still consider, at this stage, that the S. American soya production will be strong (even if lower than current predictions). As such, we believe soymeal prices should decrease later in the season, once both Brazilian and Argentinian productions will be better secured. This situation is also supportive for OSR prices, now trading close to €450. We are getting near our selling target….
A Russian missile damaged a bulk carrier entering a port in Odesa region, killing one and injuring four people. Since Russia withdrew from the Grain Deal, they carried out 21 targeted attacks on port infrastructure but it is the 1st time they directly target a private ship. Since the temporary corridor started in August, Ukraine exported 1MT of grain & oilseeds (500kt per month). To reach their export target they would need to export at least 3 times more (1.5MT per month). This attack will most probably continue to slow down exports out of Ukraine. A supportive geopolitical situation for world prices.
Heavy rains in the UK are directly impacting the new crop production potential. If it is hard to quantify the affected area, some farmers are already reporting a 2019 scenario. We will soon start to survey the extend of the problem. A similar scenario is also developing France and parts of Germany and Poland. In France, only 62% of the wheat is in the ground, according to FranceAgrimer. Nov24 is now trading at a £10 premium to May 24. This spread could continue to expand. We advise to hold on any new crop sales for now.
Yesterday the temporary corridor was suspended as Russian warplanes were threatening the commercial ships security. It looks like exports have resumed today as we see a large number of vessels going in and out of Odesa ports. This is the reason why wheat and OSR prices lost most of their steam at the end of the trading day yesterday.
More than 700kt of grain and oilseeds have been exported via Odesa ports since Ukraine decided to unilaterally resume a temporary corridor. Markets were considering this new export potential as bearish. So far this season, Ukraine has exported 30% less volume than last year. Ukrainian officials said today that "the current ban is in force on October 26, but it is possible that it will be extended". It should be supportive and prices are reacting on the upside this morning.
Following on a straight fall since November 2022 wheat prices have stabilized around their lows, with very little volatility since harvest. UK prices are stuck below the psychological level of £200 and EU prices now trade below the strong support of €230. Low wheat prices rely mainly on strong and cheap Black Sea supplies leading to sluggish EU exports. We will see here how the war is directly and negatively impacting farmer’s ex-farm prices in Europe and the UK.Read more
|t-ice||LONDON WHEAT||Jan '24||183.65s||183.65||s||-0.35||N/A||183.65||ICE||01/12/2023||18:15:40||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||LONDON WHEAT||Mar '24||189.25s||189.25||s||-0.35||N/A||189.25||ICE||01/12/2023||18:15:40||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||LONDON WHEAT||May '24||195.05s||195.05||s||-0.35||195.05||196.20||193.10||827||7771||ICE||01/12/2023||18:15:40||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||LONDON WHEAT||Jul '24||201.20s||201.20||s||+0.15||N/A||201.20||ICE||01/12/2023||18:15:40||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||LONDON WHEAT||Nov '24||206.80s||206.80||s||+0.40||205.50||207.40||205.15||297||2132||ICE||01/12/2023||18:15:40||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||LONDON WHEAT||Jan '25||209.95s||209.95||s||+0.40||N/A||209.95||ICE||01/12/2023||18:15:40||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||LONDON WHEAT||Mar '25||213.05s||213.05||s||+0.40||N/A||213.05||ICE||01/12/2023||18:15:40||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
|t-ice||LONDON WHEAT||May '25||215.80s||215.80||s||+0.40||N/A||215.80||2||ICE||01/12/2023||18:15:40||LONDON FEED WHEAT||LONDON_FEED_WHEAT|
Facing unprecedented uncertainty, farmers and feed users need a better understanding of market volatility to optimise returns and manage their price risks.
ODA captures and analyses global as well as local market information to improve your grain price performance and limit your risks.
We can save you time and inform your decisions. Become part of the ODA community of farmers and improve your grain marketing.
A membership delivering stimulating grain marketing news, analysis and advice, both Daily and Weekly.
An interactive membership embracing regular meetings and advice hotline,
helping you identify and manage your risks and set your sales strategies.
An individual business support delivering bespoke analysis, advice and strategy, embracing futures and options alongside physical sales.Learn more
Invest in yourself: ODA Grain Marketing and Price Risk Management Training Course.Learn more
ODA’s team is based in the UK. However, we provide our services to farmers and feed users all across Europe and the Black Sea. This large community of farmers and industries enable us to be precisely informed of market changes. This information network is key to provide our clients with the most accurate market information, analysis and advice.