News DCA Arable Farm Index
Arable farming index does not maintain level
A rising onion price did the DCA Arable Farm Index in May to recover from its previous dip. The lack of a listing in the second half of June, coupled with a falling potato price, means that the Index has to lose ground.
The first week of June was good for the highest result for this month, with almost 89 index points. On the last days of June, 78.6 points were left. The onion quotation in Emmeloord reached its peak on May 27, after which it dropped by €17 per 5 kilos to €100 until June 21,50. This was immediately the last listing.
Futures market in downward spiral
During the month of June, the April contract on the EEX futures market has been under constant pressure. Pressure from growing weather in Europe and new acreage figures, which point to a slight expansion. During the month, the contract dropped €3,60 per 100 kilos to €7,20. At the start of the new month, the price bounced back a bit.
Since the end of March, the feed wheat quotation in Rotterdam has been able to maintain a level of €200 per tonne or higher. That changed on June 24. The price fell by 8,5% to €184 per tonne. He has since risen again. Now that the combines are driving on the European continent, the market is torn between the various yield messages. The weather also affects prices. A moderate weather type has tempered an uplifting effect, although it remains dry on average in many parts of Europe.
Factor area
At the end of June, CBS announced the provisional acreage figures for 2020. This allows the DCA Arable Farming Index to make a better estimate of the various agricultural markets. The calculation is still based on the hectare yields of 2019, multiplied by the surface area. This together with the price forms the index per week. The acreage for ware potatoes, seed onions and winter wheat all decreased slightly. Only that of sugar beet increased.
The Arable Farming Index currently records a level that is below the 5-year average with about 10 points. The multi-year trend is that the Index uses these weeks to recover and choose a direction depending on crop growth and price development for the coming season. The increase stabilizes in August, only to creep up slightly until the end of the year.
Future unpredictable
It is very difficult to say how arable income will develop this season. The wheat market has a solid foundation, but without significant peaks. The onion market only picks up again in the land season and got off to an ambitious start at the end of June. These ambitions have now been tempered somewhat by the growing weather.
It is uncertain how the yields will turn out for the plots, most of which are experiencing problems to a greater or lesser extent. From emergence problems to hail and dust damage to insect damage. The prizes are only handed out at the finish. The most difficult of all is the potato market, which is stepping into the unknown. The consumption of chips and their recovery is crucial in this regard. Based on the acreage figures, no mood is to be expected and the weather is not cooperating either.
Also take a look at the renewed DCA Arable Farm Index Page op Boerenbusiness.NL. You can view the (historical) progress of the arable barometer via the updated and interactive graph.
Niels van der Boom
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