High quality pressures milling wheat premiums

Milling wheat premiums have fallen by about £3.50/t on average this week, reflecting the high quality of the crop in some areas.

This put the average spot price for full spec breadmaking milling wheat at £136/t ex-farm on Friday (19 August) but around the regions, prices ranged from £126-£147/t.

The average premium was just over £15/t, hiding a wide range from just £12/t in parts of Kent and Sussex to £25/t in other areas including Oxfordshire, Buckinghamshire, Northamptonshire, the East Midlands, Norfolk and Suffolk.

See also: Land prices to fall as farmers wait for certainty

Overall, a lack of farmer selling and the weak pound continue to support UK wheat values, with the average feed wheat spot price at £121/t ex-farm on Friday, a rise of £2.50/t on the week.

As well as a further downgrade to the likely size of the German wheat crop, to 24.2m tonnes, rain is damaging quality there. Germany has been a regular provider of high quality wheat to the UK in the past few years, a trade that has grown markedly following the disastrous quality of the 2012 UK wheat crop.

This week also saw analyst Strategie Grains cut its EU soft wheat estimate by 7.7m tonnes to 137.9m tonnes (151.2m tonnes 2015/16). Barley output is set to fall by 1.5m tonnes to 60.6m tonnes (61.2m tonnes 2015/16).

With a poor quality French wheat crop, the country’s exports are set to drop sharply, opening up opportunities for British wheat. However, traders are warning that ergot could be a problem.

Spot feed barley prices on Friday ranged from £100-£104/t ex-farm, with the strongest prices in the North West.

Over the week, the average spot oilseed rape price gained another £6.80/t to stand at £304/t ex-farm.