Partly Cloudy

Partly Cloudy

max temp: 17°C

min temp: 13°C

ESTD 1874 Search

Newmarket: Fears raised over volatility of cereals and oilseed rape markets

06:01 24 May 2014

David Neale, Agrii

David Neale, Agrii


UK growers are highly vulnerable to cereal and oilseed rape markets which show signs of coming under increasing pressure, an expert has warned.


Speaking to growers at a breakfast meeting at Newmarket earlier this month, David Neale, head of crop marketing at agricultural distributor Agrii, estimated that barely 15% of this year’s combinable crop has been sold to date, compared to the 30% he likes to see ahead of harvest for the best balance of market value and security. When buy-back contracts and other variety-specific marketing arrangements are taken into account this means the bulk of free-market crop remains unsold ahead of what has the potential to be a bumper harvest in the UK, he warned.

“New crop prices have fallen by £5/mt in the past week,” he said. “Demand is poor, we are not export-competitive and the use of wheat for ethanol production is likely to be much lower than predicted.”

Mr Neale pointed out that feed wheat has been trading at significantly less than £150/tonne for November movement.

“Thankfully, at the moment we have a good grain harvest in prospect for a change. And, after the past few seasons we certainly deserve one. However, the harvest prospects for much of the rest of the world are equally promising. All parts of Europe right through to the Ukraine and Russia are increasing production forecasts. So too is Australia, while old crop stocks hang over spot and harvest values.

“At the same time, pressures on both cash flow and storage are likely to make a higher level of harvest movement than usual necessary for many. Haulage and storage may be problematic for merchants with the lack of export demand leading to a short-term shortage of buyers as well as boats.”

Mr Neale strongly advised growers across the country to carefully assess their unit costs of production so they can make considered marketing decisions rapidly in response to what are set to remain highly volatile markets in the run-up to harvest.

“Of course, we may see speculatory movements in prices caused by political unrest or damaging weather patterns, but to rely on these in the face of what looks to be a large UK crop is a very risky strategy.

“So if you want to avoid the risk of leaving all your eggs in the post-harvest market basket and build greater security into your returns you need to be in a position to seek out and seize any opportunities as they arise with a good understanding of the margin they’re likely to deliver.”

On the production side, he said yields will be an even more important driver of acceptable profit than usual in such a market. So anything that can be done to maximise outputs will be more worthwhile than ever.

He also urged growers not forget bushel weights which will be crucial in securing the best available returns in an over-supplied market. All the more so, given the huge proportion of the current wheat crop in Group 3 and 4 varieties with their particular quality risks, and the ever-present danger of fusarium if conditions stay unsettled.

“We must avoid becoming the cheapest sellers in the world market,” he concluded. “So everyone needs take advantage of every reasonable marketing opportunity they have this season. And they musn’t let either output or quality fall short at the final hurdle. Or they could easily find themselves with a nice full barn but very little prospect of a decent bank balance.”



Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

Nick Alston, Essex Police & Crime Commissioner.

Up to 15 police stations in Essex could be axed as the county’s force admits its property estate is “haemorrhaging money”.

The of the A130 Road at Rettendon, opened in 2002. PIC ROB SAMBROOK

A section of a major road in Essex will be upgraded into a three-lane highway to cater for a significant increase in traffic.

Motorists were sent on a diversion nearly 30miles (47.7km) long

We all bemoan the diversions which close the highways and byways of Suffolk when roadworks are set up.

The Orwell Bridge

There have been a number of crashes on the county’s roads this morning.

Mr Kathirithamby, the premises licence holder and director of KVS Food and Wine Ltd, in Bramford Road, was fined £803 and had his personal licence revoked after pleading guilty to selling alcohol to  children

An Ipswich man has pleaded guilty to selling alcohol to children from his shop.

Campaigners have been calling for a by-pass for decades.

Local councils are to spend £500,000 in a bid to kick-start proposals for a four villages’ by-pass – a move that could see the road opened by 2021.

The homeless in Ipswich tuck in to a hot meal at the Ipswich Winter Night Shelter. Photograph Simon Parker

The Ipswich Winter Night Shelter has launched a drive for volunteers ahead of opening its doors on December 2.

The Northgate High School team competing at a regional heat in Ford Dunton

Northgate High School pupils are preparing for a grand prix experience as they compete in the finals of the Greenpower International Kit Car competition.

Work is being stepped up at hospitals in Suffolk and north Essex to deal with “bed blocking” after new figures revealed more than 38,000 “bed days” have been lost because of the issue since 2012.

Ipswich Crown Court.

A Suffolk man who sexually assaulted two schoolgirls has been jailed for 10 and a half years.

Most read

Most commented

Topic pages