The market is already beginning to react to the likelihood of much increased barley supply from the 2020 harvest.
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Futures markets have begun to reflect the significantly lower areas planted to winter wheat for the coming season. While supply in the current marketing year is generally regarded as being more than adequate across wheat and maize, there is growing concern about the consequences of the poor backend weather for both acreage and yield of this crop for the 2020 harvest.
Regardless of the outcome of Brexit, an AHDB grower survey currently suggests a nett 9% decrease in wheat area in the UK, which includes a significant increase in spring wheat planting (358%) – seed availability and weather permitting. But the impact on output is likely to be much greater than 20%. Some are of the view that not much more than 35% of the traditional wheat area has been planted in the UK.
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There are also concerns for wheat production in the US, parts of the EU and there is continued uncertainty over Australian production.
But less wheat is likely to mean increased barley production and this is now being seen as a negative sentiment driver because of the apparent inevitability of higher supply. But the market still believes it must first deal with a big crop from the 2019 harvest.
Native markets remain broadly similar to last week with wheat at €185/t for near-by, €190/t for May and €185/€186/t for November ‘20. Barley is a big weaker with near-by at €173 to €175/t, May around €175 to €178/t and November around €173 to €175/t.
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Futures markets have begun to reflect the significantly lower areas planted to winter wheat for the coming season. While supply in the current marketing year is generally regarded as being more than adequate across wheat and maize, there is growing concern about the consequences of the poor backend weather for both acreage and yield of this crop for the 2020 harvest.
Regardless of the outcome of Brexit, an AHDB grower survey currently suggests a nett 9% decrease in wheat area in the UK, which includes a significant increase in spring wheat planting (358%) – seed availability and weather permitting. But the impact on output is likely to be much greater than 20%. Some are of the view that not much more than 35% of the traditional wheat area has been planted in the UK.
There are also concerns for wheat production in the US, parts of the EU and there is continued uncertainty over Australian production.
But less wheat is likely to mean increased barley production and this is now being seen as a negative sentiment driver because of the apparent inevitability of higher supply. But the market still believes it must first deal with a big crop from the 2019 harvest.
Native markets remain broadly similar to last week with wheat at €185/t for near-by, €190/t for May and €185/€186/t for November ‘20. Barley is a big weaker with near-by at €173 to €175/t, May around €175 to €178/t and November around €173 to €175/t.
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