UK cereal markets have remained supported in the past week, following a bullish global production report and tight domestic ending stocks.
The US Department of Agriculture‘s latest report slashed international coarse grain production by 14m tonnes, driven by sharply lower corn and sorghum yields in America. Although it increased its wheat production estimate by 9.7m tonnes, due to larger than expected yields in Russia, Ukraine and the EU, strong export interest from Algeria and Saudi Arabia helped to support market prices.
In the UK, DEFRA revealed that on-farm wheat stocks to the end of June in England and Wales were the lowest since 2000 and 39% below June 2010 – wheat and barley held by ports, co-ops and merchants were down by 17% and 46% respectively.
Despite the uncertainty rocking financial markets, UK feed wheat gained £3/t over the week, to average £155/t ex-farm for spot movement as Farmers Weekly went to press on 17 August. Milling wheat premiums widened to about £18/t due to concerns over quality across Europe after more wet weather. “Strategie Grains currently sees 82% of the German wheat crop of bread quality, down from its previous estimate of 93%,” said a report by HGCA.