With the grain markets so active, we wanted to take the November update to look at the current situation following the 2022 harvest and look ahead to 2023.
2022 harvest
The wheat market had seen some stability recently, with values trading around £265-£268 on the Nov 22 futures. This was keeping the physical market around £270-£275 ex-farm for November/December positions.
With Russia again threatening to suspend Ukrainian grain shipments, the markets have once again reacted by raising prices, with ex-farm prices raising to £285 for November. However, there is a much firmer outlook going forward, with December now at £290 ex-farm.
If this increase stays for the long term depends on how rigid the Russian blockade is. These latest events show just how volatile and uncertain the grain markets currently are.
Attention now turns to the southern hemisphere. Australia has had mixed growing conditions this year, but expectations are for a reasonable harvest. If this materialises, it could keep a lid on prices for this season.
Demand for feed barley is currently quite low, with the weakness of the pig and poultry industries having a notable effect. Demand from the export market is also slow, which is keeping prices weaker.
Ex farm values are generally around £240 ex farm although there are still reports of stronger prices coming from merchants with homes to fill. The ongoing maize harvest in Europe will still have an effect with uncertainty on crop performance in certain areas affected by drought and hot temperatures. A stronger maize market will support the barley values going into winter.
Looking towards 2023 harvest
It is still too early for autumn sown crops to have any effect on 2023 prices. As the month progresses and we start to see more on the conditions and early quality of these crops, we will be better placed to give an idea of the expectation for next year.
At this stage, it should be noted that autumn crops have established well and there aren’t any less crops in the ground. However, the success of this seasons malting barley along with expensive input costs has prevented many farmers from sowing more autumn crops than in 2021.
New crop wheat is currently trading at £268 for Nov 23 futures making ex-farm values at a similar level for Nov move.