Grain merchant Gleadell has announced strong results for its April–June 2013 pool for cereals and oilseed rape.
The company achieved a significant premium over average open market prices for all the commodities during the period.
Feed wheat growers received an average return of £189.89/t net of haulage and commission. That compares with an average free market ex-farm price since the pool opened in October 2011 of around £172/t, based on actual grain purchased by Gleadell in the open market.
The oilseed rape pool averaged £372.84/t, and feed barley £171.50/t. Milling wheat ranged from £201.50 to £209.50/t depending on grade.
The results reflected a good performance in extremely volatile markets, says Gleadell managing director David Sheppard. The ex-farm feed wheat price for June movement over the period, based on the May 2013 futures price, ranged from about £146/t in October 2011 to top out at £215/t in October 2012, before sliding back to close out at below £160/t.
“The 2012/13 grain marketing season will certainly be one that many will remember for years to come – and not for good reasons,” said Mr Sheppard. “The worst wheat quality in living memory, coupled with the highest prices in Sterling terms, combined to make marketing decisions difficult and volatility has been an ever-present factor for all participants to contend with.”
Extremely variable and generally poor UK quality meant that large-scale imports, mainly of milling wheat, were an ongoing feature for all of the season, with an end-of-season imported wheat figure of over 2.6m tonnes, he said.
A large tonnage of maize was also imported, much of it destined for the Ensus bioethanol plant. As the UK priced itself as an importer for at least the first seven months of the season, exporting wheat was extremely difficult, Mr Sheppard recalled.
“From the turn of the year all grain markets fell back significantly from the highs seen last autumn. We took a proactive attitude to marketing our April–June Pool and successfully avoided the trap of waiting in vain for an end of season rally. We also locked the pool into good quality premiums which also came under pressure as the season ended.”
The results represented an excellent return for pool members and showed the Gleadell pool was an extremely cost-effective and useful tool for farmers in volatile and unpredictable markets, said Mr Sheppard.
Commitment to this season’s pools was encouraging, and largely reflected changes in cropping, notably with a higher barley tonnage and less wheat and OSR, he added. “Given the recent market movement, the 2013/14 sold position looks promising. We have also had a significant commitment already for the 2014 harvest.
“The 2013 UK wheat harvest potential has improved during June and July as better weather has helped crops to an extent. However we fully expect the UK to again be a major importer in 2013/14, but we will need some sort of major weather event elsewhere in the world in order to avoid a double whammy of lower UK crops and lower prices too.”
