Drought conditions to last into 2023 for English regions: Grain market daily

• UK feed wheat futures (Nov-22) closed yesterday at £265.00/t, down £7.50/t from Monday’s close. May-23 futures closed at £278.00/t, down £6.40/t over the same period. New crop futures Nov-23 closed at £262.15/t, down £5.10/t from Monday’s close.
• These falls followed global wheat contracts (Chicago and Paris) down yesterday, on ‘positive and constructive’ talks between the UN and Russia on extending the Ukrainian export corridor. A lack of fresh demand for western European wheat and competitively priced Russian wheat also weighed on prices.
• Ukrainian Agriculture Ministry revised up their 2023 winter wheat area to around 4Mha, up from 3.8Mha in the previous outlook. To 18 October, 61% of the expected area has been sown. This progress lags last year likely due to rain and lack of funds. This year, 4.6Mha of wheat was harvested due to the invasion.
• Paris rapeseed (Nov-22) gained €2.50/t yesterday, to close at €623.25/t. This is despite falling Chicago soyabean prices and follows support on the wider vegetable oil complex, as rainstorms hit areas of Malaysia and Indonesia, and concerns on higher Indian import taxes.
• Chinese soyabean stocks look to tighten due to delays of US shipments. Ships containing up to 3Mt of US soyabeans scheduled to arrive this month are 15–20 days late according to Refinitiv sources. Mississippi river levels are low currently, a key commodity waterway.
• This evening, AHDB Cereals & Oilseeds are hosting one of a number of webinars, which are an introduction and demonstration of the proposed Digital Grain Passport. To sign up for today’s event starting at 6:30pm, please click here.

On Friday, the National Drought Group met to discuss drought conditions across England. The meeting found that average rainfall levels over winter, will not be sufficient to avoid drought or drought conditions next year.

Despite average rainfall in September, the first average rainfall for six months, drought remains. This is down to soils remaining drier-than-usual, and therefore reservoir stocks continuing to decrease as monitored and reported by the Environment Agency.

Looking to 2023

Water companies are expecting water resources to be ‘recovering’ or ‘normal’ conditions by spring 2023, should we receive average rainfall. However, if rainfall is below average, then parts of England may remain in drought conditions beyond spring 2023. Notably this includes parts of the South West, South East, East and Yorkshire, and East Midlands.

Autumn and winter rainfall forecasts are reportedly looking to be dry. High pressure looks set to dominate across November and December as reported by the Met Office in a recent blog. High pressure leads to light winds and settled weather, as it reduces the formation of clouds.

What might this mean?

To sustain essential water supplies for spring/summer 2023, the group discussed actions needed to be taken over the next six months. Actions from water companies including implementing their drought plans and speeding up infrastructure plans for water supplies. The Environment Agency will manage water abstraction licences, operate water transfer schemes, and make decisions on drought permits.

Low soil moisture is a concern for farmers, and dry conditions has led to reduced water availability for farmers this year. Should we see below average rainfall this winter, the National Drought Group suggest that winter refill of farm storage reservoirs might be constrained.

The group are set to meet again later this autumn, to discuss the latest update on conditions and to discuss if further actions are needed.

For more information on this please visit this page.

Introducing our Grain Market Outlook Conference on 22 November 2022, at the Belton Woods Hotel.

Please join us on the day for this year’s conference. There will be lunch provided on the day, with some fantastic speakers lined up.

Tickets are free for you to attend, as we hope this will be a useful tool against the challenging situation we currently face. This event has moved out of London this year to Grantham, to welcome farmers and the trade alike.

What can you expect from the day?

9:00 – Arrival

Our chair for the day: Julius Deane, Carr's Flour.

9:30 - AHDB Market Outlook

The AHDB team delivers a presentation on where prices are heading and what factors are driving this market, both domestic and global.

We discuss the two key factors we believe are steering price direction this season. Firstly, the impact of the war between Russia and Ukraine and the impact this has on global supply and trade. Second, the impact of a global and domestic recession might have on grain markets.

11:00 - New markets, new demand.

An industry led discussion where we talk about new demand centres going forward. Speakers on the panel will give a small update and then let’s open the floor for questions and discussion.

Speakers:

• Neil Griffiths – Vivergo Fuels
• Andrew Probert - Premium Crops

13:00 – Challenges ahead - managing risk, with a focus on climate change and carbon markets.

In this session, we explore climate change as a key challenge going forward for growing crops. What can we expect from weather patterns and how does this impact industry? With weather a key determinant of production year on year.

Dr Pete Falloon, Climate Service Lead for Defra on Food, Farming and Natural Environment, will be delivering a presentation to us on climate change. This is the only virtual element to the day, with their team conscious to keep their travel emissions low.

Following on from this, and within this net zero journey in mind, Bill Gilbert joins us in-person from NatWest to deliver a presentation on the opportunities and challenges to carbon markets and biodiversity markets.

Speakers:

• Dr Pete Falloon – Met Office
• Bill Gilbert – NatWest

To sign up, please use this link. We look forward to seeing you there.

You can subscribe to receive Grain Market Daily straight to your inbox. Simply fill in your contact details on our online form and select the information you wish to receive.

While AHDB seeks to ensure that the information contained on this webpage is accurate at the time of publication, no warranty is given in respect of the information and data provided. You are responsible for how you use the information. To the maximum extent permitted by law, AHDB accepts no liability for loss, damage or injury howsoever caused or suffered (including that caused by negligence) directly or indirectly in relation to the information or data provided in this publication.

All intellectual property rights in the information and data on this webpage belong to or are licensed by AHDB. You are authorised to use such information for your internal business purposes only and you must not provide this information to any other third parties, including further publication of the information, or for commercial gain in any way whatsoever without the prior written permission of AHDB for each third party disclosure, publication or commercial arrangement. For more information, please see our Terms of Use and Privacy Notice or contact the Director of Corporate Affairs at info@ahdb.org.uk  © Agriculture and Horticulture Development Board. All rights reserved.