© Tim Scrivener

Ex-farm feed spot wheat prices held steady to midweek, despite the rain pushing new crop futures down by a few pounds.  

Spot feed wheat values on Wednesday (17 May) averaged £142.9/t ex-farm compared with £143.1/t a week earlier.

Feed barley moved up just a few pence to average £120.8/t for May old crop deliveries.

However new crop barley prices rose this week by up to £10/t to give an ex-farm range for July of £105-£125/t.  

See also: Wheat stays firm on dry weather and production forecasts

The first world grain production estimates from the US Department of Agriculture had pushed up futures markets a few days earlier, with a forecast that world total grain production in 2017-18 would be lower than consumption for the first time in five years.

Nevertheless, heavy stocks still hang over most markets, so any upward movement over the next few weeks is likely to be short term and on weather-related news as harvest approaches.

It was a relatively large drop in maize production and stocks which contributed most to the estimate of world grain production being lower than consumption.

Second highest on record

While global wheat production in 2017-18, estimated at 737.8m tonnes, is 2% lower year on year, it is still the second highest on record.

Wheat stocks at the end of the 2017-18 grain season are also forecast to hit another record.

“The thing to bear in mind here is that even though 2017-18 output is forecast lower than consumption, record level stocks from 2016-17 are expected to provide a cushion,” said Amadeep Purewal, senior analyst with AHDB market intelligence.

“However, with stock levels generally expected to deplete next season, the market is more open to supply shocks going into 2018-19 which could increase volatility.”