Dry weather has taken its toll on the UK wheat crop with grain trade experts forecasting the 2018 harvest could slip below the 14m tonne mark.
Gleadell Agriculture’s trading director Jonathan Lane suggested the final level could be between 13.6m tonnes and 14m tonnes compared with 14.8m tonnes in 2017.
The reduced supply means the UK will be positioned as a net importer with prices here exceeding the costs of shipping grain from Canada, the Black Sea, and Argentina.
Any further upward pressure on wheat prices through the autumn will depend on demand from the ethanol plants in the north-east of England which can take up to 1.2m tonnes out of the market, Mr Lane said.
The 2018 barley crop has also suffered in the dry weather, he added. But at a predicted 6m tonnes – down 0.5m tonnes to 0.75m tonnes on last year’s total – early fears of a very poor harvest have eased.
“It is too early to gauge the barley crop quality accurately at this stage. However, the demand for feed barley is likely to be strong,” Mr Lane predicted.
The lack of available forage means livestock farms are looking to bolster feed stocks. There has already been a marked rise in barley fields cut as wholecrop silage and this has the potential to strengthen prices further, he added.
According to the AHDB the dry weather has pushed up cereal prices in the UK, French and US markets.
Feed wheat futures (Nov-18) closed on 17 July for UK crop at £171.70/t, just £0.20/t below the contract high on 6 July.
AHDB analyst Daniel Rooney added Paris milling wheat futures (Dec-18) closed at £167.47/t, rising £3.29/t on the previous day’s close.
“And US new crop wheat futures (Dec-18) also closed higher at £142.63/t in sterling terms, with nearby US wheat reaching the highest price in dollars in over a week at $182.87/t,” Mr Rooney said.
Concerns over European and Black Sea wheat in the hot and dry weather are supporting wheat prices while forecasts for German barley production suggest a drop of 1.7m tonnes at 7.3m tonnes for 2018, he said.
Yields seen for oilseed rape have been patchy but are down on average, United Oilseeds, the UK’s largest farmer-owned oilseeds marketing and storage co-op has reported.
Trading manager Owen Cligg said yields were between 2.5t-4.5t/ha and the huge variation was difficult to pin on any geographical factors.
“It appears to be how the crop has come through the winter but there is no real pattern,” he said.
Overall, the total harvest will be between 1.9m tonnes and 2m tonnes, a figure well below last year despite an increased area of 611,000ha grown in 2018 compared with 569,000ha a year earlier.
This reflects a lower yield at 3.4t/ha in 2018 against 3.9t/ha a year ago, Mr Cligg reported.
He added the reduced yield was reflected across the EU with a total crop of about 20m tonnes.
Despite buyers looking to source supplies from the Ukraine and Canada to bolster stocks, prices were firm in the UK with growers happy to accept values above £300/t, Mr Cligg said.
However, he noted the continuing dry weather was causing increased speculation over planting for next years’ crop.
With planting dates looming many growers are holding back and the UK area could be down considerably next year.
Rape is relatively expensive to grow so dry seed-beds and potential failures carried a higher risk which means farmers are waiting to see if it rains, explained Mr Cligg.