Milling wheat growers with top specification crops in the barn should be quick to capitalise on strong premiums, which broke through the £50/t over feed mark last week, according to merchants.
Quality wheat prices stayed firm, despite big falls in feed wheat prices, largely because of a shortage in supply following the difficult harvest – one merchant reckoned up to 40-50% of milling wheat in his region had been downgraded to feed this year.
Crops in northern and western areas were worst affected and have therefore attracted the biggest premiums of over £50/t, while further south and east, where many growers managed to get milling wheat in before the wet weather set in, premiums were nearer £40-45/t, merchants said.
The strong premiums for Group 1 varieties such as Solstice, Xi19 and Malacca were also having a knock-on effect on Group 2’s like Einstein and Cordiale, which were trading at a £6-10/t discount, Simon Ingle of newly-formed Openfield said.
“There has been a bit more demand for full spec [13% protein, 250 Hagberg, 76kg/hl specific weight] Group 1 wheat in December, but millers have struggled to find supplies. So much wheat is still too wet at 16%-plus moisture and the higher yields also mean there are more lower-protein crops about.”
A number of millers were allowing fallbacks to 11.5% protein in order to maintain supplies to mills, he said. “In many seasons millers are reluctant to go below 12.5% protein, but with these sorts of fallbacks, I don’t think there’ll be any problem with supply. But, the current premium is there to be lost rather than not.”
Nick Oakhill of Glencore shared a similar view. “Growers should be taking advantage of this premium.” Some millers have already switched to ‘mid-spec’ wheat (12-12.5% protein, 180-230 Hagberg) and were blending it with higher specification imported German or Canadian wheat, he said. “The consistency just isn’t there in the UK this year. If the millers’ dependence switches to mid-range proteins, the premiums we have seen for top-spec wheats in the past might not be there in the future.”
Wessex Grain’s milling wheat trader Ed Britton welcomed moves by millers to use wheat that would have gone for feed in more normal seasons, but said the variable quality – particularly moisture and Hagberg – had reinforced the need for accurate sampling on farm. “We’ve seen a huge amount of re-sampling and are still moving wheat to be dried.”
He suggested the milling wheat premium could fall back to nearer £20-30/t next year and advised farmers to buy into decent premiums sooner rather than later. “A lot depends on how next year’s harvest goes and the amount of quality wheat about, but securing premiums for next year is very sensible.”