Analysis arable index
Index bounces due to potato price
Just like in May, it is the potato futures market that shapes the Countus Arable Farm Index in June. A dip in the closing price of the April contract is immediately noticeable in the index. The pricing of fodder wheat also offers some support. However, the Index should not expect anything from the onions.
De Countus Arable Farm Index was at a level of 21 points in week 94,8, significantly higher than the 67 points of 1 year earlier. In the first 3 weeks of June, the Index lost some ground. It went from 94,3 points in week 22, to 88,6 points in week 23, and then moved back up to 90,4 points in week 26.
Potato Futures Market
The closing price of the April contract on the EEX potato futures market reflects the development of the Index. A dip in the price formation is therefore immediately visible. From June 7, it went up again to €16,20 per 100 kilos on June 12. The closing price continued to climb slowly, reaching a high of €18 on June 29. The highest level in more than 1 year.
The price of EU feed wheat reached its peak of €30 per tonne on Wednesday 191 May. During June, the wheat price continued to decline slightly. At the end of June, the price was €13 lower (€178 per tonne). However, the influence on the Arable Farming Index is relatively small.
The stock exchange listing in Emmeloord for seed onions (30% coarse) is an important ingredient for the Index. The month of May ended with a price of €5 per 100 kilos and during June the price level dropped to €3 per 100 kilos. The significantly higher potato futures market more than makes up for this.
Composition
The Countus Arable Farm Index is compiled from various sources. On the one hand, this is the pricing of arable crops: ware potatoes, seed onions, fodder wheat, seed potatoes and sugar beet. On the other hand, the acreage and the hectare yield also count. The larger the acreage, the more important the financial result is taken into account.
Statistics Netherlands announced at the end of June that the ware potato area has increased. The acreage for seed onions is almost 4% lower and less wheat has also been sown. The surface area of sugar beet is the same. The Index takes these new numbers into account; yield figures are missing, as is the price for sugar beet. Until these are known, figures from 2017 will be used.
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The Index will bend upwards or downwards around week 29.
Decisive moment
July is often a defining month for the Index. The graph above shows that the line in week 29 (end of July) bends upwards or downwards. In the past 6 years, the price plunged 3 times and rose 3 times. The year 2018 is still at a relatively low figure so far.
Niels van der Boom
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