Grain markets firm on DEFRA harvest forecast

Grain markets have firmed slightly again this week, following DEFRA’s first estimate of UK wheat production, which was generally below expectations.

It pegged the wheat crop at 12.1m tonnes – 9% down on last year and provisionally the smallest since 2001. However, with quality much improved on last year, it was likely more domestic wheat would be used in the milling sector, said a report by HGCA.

Its second cereal quality survey showed potentially the best results for a number of years, with 37% of group one milling wheat reaching the full specification compared to just 3% last year. “As a result, UK import needs will be different in 2013-14, but the UK will almost certainly retain its net-importer status for wheat in a second consecutive season.”

In contrast, barley production was up by 29% on the year, to 7.1m tonnes – the largest crop since 1997. Export levels and animal feed use would therefore play a key role in the supply-and-demand balance, said the report.

“The outlook is certainly less bullish than a year ago, due to a rebound in global grain production, but there remains much to monitor and we are not out of the woods yet.”

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