Quality concerns leave UK wheat exports in balance UK
By Olivia Cooper
GRAIN markets went very quiet this week in response to rain bringing harvest to a halt.
Wheat prices firmed last week, driven by better French markets where lower yields had been reported.
Banks Cargills Richard Whitlock says: "Harvest is almost complete in France, and yields are calculated to be 10-12% down on last year, with quality poor in the south, but better further north in the Paris basin."
UK feed wheat is trading around £74/t ex-farm for spot movement, with November £4-5/t above that. At these levels, UK wheat is too expensive to compete for exports with French, Danish and eastern European supplies.
Mr Whitlock adds that it remains to be seen whether the UK needs to export at all this year. Wheat harvest is only just underway, with early yields ranging from disappointing to meeting expectations.
If milling wheat quality is poor, more imports will be required and any surplus of feed wheat will be priced into export destinations. But quality has been reasonable so far, with early samples of Malacca and Soissons trending to slightly low bushelweights and protein.
"Millers and farmers carried larger than normal stocks of old crop milling wheat into the new season," says Glencores Robert Kerr.
"This has taken the edge off milling demand, combined with some German milling wheat being imported to the UK."
Group 1 wheats are fetching about £85/t ex-farm for August, with the premium widening to £15 over feed for November.
Meanwhile, winter barley harvest is about 90% complete in the south, where spring barley harvest has also started, says Scats malting barley trader Robert Leachman.
"Malting quality is generally extremely good, with nitrogen content ranging from 1.5-2%. Even Regina is bold this year, with most samples making more than 90% retention over the screen."
Yields have averaged 6.2-7.4t/ha (2.5-3t/acre) for winter malting varieties, while spring barley seems to be coming in at about 5t/ha (2t/acre).
"Nitrogens seem to be higher in the midlands on heavier land, where those needing quick movement are likely to have to sell into the feed market," adds Mr Leachman.
August premiums remain static at £5-7/t over the feed barley base of £64/t ex-farm. "But feed barley rises to £70/t for November, so it would pay to store the grain if possible," according to Mr Leachman.
All eyes will now be on the spring crop and the Scottish harvest, both of which will be crucial in directing the course of malting premiums in the near future. *