UK wheat quality is looking reasonably positive despite the rain, but feed wheat is proving increasingly difficult to shift even as prices continue to slide.
Harvest revved into gear again last weekend over most of the country, although growers in Lincolnshire and Yorkshire were still struggling with showers.
All eyes are on the feed wheat market however, with the UK still struggling to sell its large crop against more price-competitive producers and with most of the trading sewn up early.
“I can’t remember being in a harvest with such a big surplus and the UK having so little sold,” said Jonathan Lane, trading director at Gleadell. “The business is already done.”
Only about a tenth of the grain that would normally be exported in August had so far been sold, said Mr Lane.
“Prices are very depressed but our grain is still too expensive,” he said.
French wheat was being offered for September at £125/t delivered to Northern Spain and a 25,000t shipment from the Ukraine was being offered at £122/t. UK wheat however was being offered at £129/t, with buying interest around £3/t below this, said Mr Lane. With a UK crop of 16-16.5m tonnes and an export surplus of around 3m tonnes, he said there was “concern about where all the wheat is going to go.”
“Buyers are covered until November, so it’s very tricky to see what will happen.”
The question now would be whether European prices increased or UK prices fell.
As Farmers Weekly went to press on Wednesday 20 August, the futures market put UK (Liffe) feed wheat for November at £120.90/t – down from £123/t the previous Wednesday.
The milling wheat market looks in better shape meanwhile, with France mainly out of the picture, however a good German crop was undercutting UK prices, said David Eudall, wheat and barley trader at Nidera.
According to HMRC figures, Germany undercut the UK in May and June. This, plus tightness in UK milling supplies, had led to increased imports in recent months, said HGCA, while 30% of the UK’s milling imports in June were from Canada.
However, despite recent rain most UK milling wheat looked likely to make specifications, although good yields had slightly diluted the protein levels, said Mr Eudall.
Gleadell had also seen a slight deterioration in quality. “The Hagbergs and bushel weights are starting to slip, but it’s not a disaster,” said Mr Lane.
Protein levels were mainly down to 12%, but there was also a significant amount coming in at 11%, said Mr Lane.
Milling wheat premiums were still reasonably good, with Group 1 grain attracting premiums of £33-37/t, while wheat with 11% proteins were seeing £14-16/t premiums. The Paris milling wheat price for November remained at €172.25/t (£137.59/t) on Wednesday 20 August.