Trade forecasts two-tier wheat market on way
Trade forecasts two-tier wheat market on way
By Olivia Cooper
WHEAT quality is beginning to suffer in parts of the UK, with patchy rain delaying harvest in some areas this week. But crops are holding up well elsewhere, and a two-tier market is beginning to develop, say traders.
Combines in Cambs have been sidelined for much of the week, according to local co-op Fengrain. "It is very wet," says chief executive Chris Barnes. "Clearly the quality has got to be in jeopardy." Hagbergs and bushel weights are of particular concern, he says. Harvest is about halfway through in the area and up to 70% of the crop could end up in the feed bin.
It is a similar story across much of the east, with Hagbergs dropping away in Lincs and Essex. "Its not a pretty picture, but its not disastrous," according to Harlow Agricultures Stuart Attridge.
Milling wheats are worst affected, averaging 150-170 Hagberg, he says. Soft wheats average 130-180 Hagberg, with proteins and bushel weights at 11-13.5% and 74-77kg/hl, respectively.
Across the rest of the country, weather and quality are looking better. However, samples continue to be variable. "There are areas in the West that are still producing very, very high Hagbergs and good results," says Glencore Grains Robert Kerr.
"The further east you go the problems seem to be mounting. But most of the wheat weve seen so far is not written off." He reckons millers could lower their intake requirements to 125 Hagberg if necessary, and says about 70% of the samples he has seen are of reasonable export quality.
A two-tier export market is already developing – one for low-priced feed wheat and another for higher-priced soft and hard milling wheat. Feed wheat for export is currently worth about £56/t delivered to a port in September, while good quality soft wheat is fetching around £4/t above that.
Richard Whitlock, wheat director at Banks Cargill, says good grain handling and marketing will be vital. "Accurate sampling, accurate testing and good placement will go a long way towards mitigating some of those problems."
But Gleadell Agricultures David Sheppard says exports are already falling behind. Although DEFRAs June census put the English wheat area at just 1.9m ha (4.7m acres), yields are above average and a 16.5-17m tonne crop is still likely, he says.
This means 400,000t will have to be exported every month. *