Monday Market Briefing - 11th March 2024

A dull week in the markets ended virtually unchanged as the USDA report was, as expected, lacking any real surprises. THE EU confirmed that Ukraine’s unfettered access to European markets will continue for at least another 12 months meaning the backdrop to our marketing through the next season will stay much as it is now – increasingly well established supply routes into Western Europe will continue to flow.  This low base price – high quality premium environment presents quite a dilemma for sellers looking forward. Feed grain growers might as well wait now and hope for something on the supply side to come to the rescue, but quality growers will face some tricky decisions to maximise returns.

Europe’s current malting barley prices are high enough to attract inbound cargoes from Argentina and even Australia all of which will arrive in the spring/summer months, illustrating just how tight old crop supply has become. Hence the delayed plantings of spring barley in France has the markets attention and there should be strong interest for early new crop supply. Nevertheless, we are keenly aware that UK + EU27 output next year should produce a substantial surplus to sell to third Countries and this time China might not be there to mop it up.

UK Milling wheat also has hefty new crop premiums attached to it, apparently linked to relatively tight spot supply. Here the threat is German A grade, a consistently high quality alternative to UK group 1 and widely quoted at an attractive discount for early season delivery.

More often than not over the past decade, selling quality forward has been the wrong call as premiums tended to widen post-harvest, but these values are exceptionally high relative to the base price. It’s not one to throw the kitchen sink at, but maybe 10% of your expected crop locked in at these levels makes sense.

Have a good week.