Grain prices are firming, mainly on currency changes but also on slow farmer selling in the spot position.
With fieldwork taking priority and prices below what they were in mid-August, growers are reluctant to offer grain, so buyers looking for immediate supplies are having to pay up to get them.
However, unless they need stocks in the next week or so, most consumers are sitting back in the knowledge that there is plenty of wheat around.
September feed wheat values increased by about £2/t in the week to Wednesday (21 September), putting them in a range from £114-£120/t and at an average of £116.2/t ex-farm.
The top end of this range was in the catchment areas of the two bioethanol plants in Yorkshire and on Teesside.
UK November 2016 wheat futures were also supported this week by concerns that rain could hold up the US maize harvest which at 9% complete early this week was slightly behind the average, said AHDB Cereals and Oilseeds.
This has firmed prices because the US has heavy maize export commitments and harvest of the forecast record crop needs to keep up a good pace.
As Farmers Weekly went to press on Wednesday (21 September) the London November feed wheat futures contract was at £125.25/t, having climbed £3.50/t over the week.
Midweek saw the pound’s value drop below US$1.30 again and as low as €1.15, making UK grain competitive on its traditional export markets.
“The problem is finding the buyers,” said Gleadell’s trading director Jonathan Lane.
Competition on the export front had relaxed as harvest export pressure had eased in the Baltic area, he said. These suppliers were expected to come back into the market once they had assessed the crop further.
Feed barley is lagging at a discount of about £15/t to wheat and in a narrower price range, from £99-£104/t ex-farm spot.
Full-spec milling wheat premiums have steadied at about £10-£15/t, reflecting the good quality of the 2016 crop.
French wheat drops
Meanwhile French wheat output has been put at its lowest level since 1993-94.
Analyst AgriMer estimates a crop size of 28.5m tonnes compared with last season’s 40.9m tonnes.
This could lead to a drop of 45% in French wheat exports, potentially opening up opportunities for UK wheat.
After several changes to ergot tolerances and in some cases to specifications even after cargoes had arrived, exporters are nervous of tendering for the very important Egyptian wheat business.
However, Egypt is the world’s largest wheat importer and will need to come back into the market at some stage to avoid shortages and political unrest, say traders.
2016 Grain quality
- While yields have failed to impress this harvest, quality has largely held up, with the highest protein levels for a decade, according to provisional results of AHDB’s Cereal Quality Survey
- Among the 10,166 wheat samples analysed by the end of August, the provisional average protein level was 12.6%
- Specific weight – average of 77.2kg/hl (four-year low) from a range of 72.0-82.0kg/hl
- Hagberg – average 2016 and a range from 219-413 seconds
- Protein – average of 12.6% was from a range of 10.2-15%
- As in previous years, the early provisional data has a regional bias towards the East and South East and also Group 1 and 2 varieties, so figures may change as more samples are analysed
- Winter barley quality was less positive. Early data indicates a smaller specific weight and grain size than previous years.
- Specific weight – average of 63.6kg/hl and a range of 56.2-70.4kg/hl
- Nitrogen – average of 1.59% for winter barley and 1.61% for spring barley
- Retention over a 2.5mm sieve – average of 85% for winter barley and 92% for spring barley