Friday, 6 December 2019
- UK wheat futures contracts continue to decline; the May-20 contract closed trading yesterday at £148.75/t, down £0.75/t. Nov-20 contract closed at £155.25/t down £0.55/t.
- Chicago soyabean futures (Jan-20) closed yesterday at $324.87/t, up $2.29/t. China has opted to renounce some import tariffs on US soyabeans as trade talks progress.
- Paris Milling wheat closed yesterday at €183.00/t down €2.75 on last Friday’s close, which was the highest since July. Both Paris and Chicago markets have been under pressure from low export demand.
Rainfall continues to delay French plantings
Poor weather in France has continued to hinder fieldwork with French farmers still lagging behind in planting winter crops. For winter barley plantings reached 91%, up 2 percentage points from last week and 1 week behind average pace.
Wheat plantings also remain slow, with only 83% of the French winter wheat crop estimated to have been drilled by Monday (2 Dec 2019). This was a marginal increase of only 3 percentage points on the week and significantly behind last year, where over 90% of the crop was planted by mid-November.
Crop conditions are also looking to be poorer compared to previous years with only 73% of the crop rated as good-excellent, down slightly from last week (75% good/excellent) and 9 percentage points below the same period in 2018.
For wheat the delays in winter crop sowing and waterlogging in parts of France are likely to cause a reduction in the area this season. While this is a supportive factor for new crop pricing currently we have seen new crop Chicago and Paris futures remain under pressure from slow export sales. In addition, looking at the global picture wheat areas in the Black Sea region have increased and conditions are looking good so far, which could make up for the fall in European production.
For barley the delays in French sowings could result in an increase in spring cropping areas. If spring barley production was to rise this would lend additional weight to what is looking to be a well-supplied European barley market.
The UK is likely to see an increase in spring barley area and potentially a heavy carryover from this season. A rise in French barley production would likely weigh further on UK prices.
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