Feed wheat falls to £178/t amid ample global stocks

Margins for UK cereal growers remain under pressure, with subdued wheat prices struggling to offset high on-farm input costs.

Ex-farm feed wheat softened slightly this week to £178/t on 24 June, while milling wheat averaged £187/t.

A positive for the market has been a weaker sterling against the US dollar recently, which has made UK wheat more price competitive at a global level in the short term.

See also: UK fertiliser imports increase as merchants stockpile

However, with harvest approaching, traded activity remains relatively quiet.

Looking ahead to this year’s harvest, crops in the UK are generally faring much better than last year, although prolonged dry conditions and extreme temperatures in some regions are likely to impact yields.

UK feed wheat futures for the November contract averaged £180/t on 24 June, down from £193/t in late May when prices peaked.

Traders say markets remain quiet, despite recent cuts to production forecasts in Europe and further afield.

Global grains

Global wheat stocks are near record highs with a large carryover of grain, according to the US Department for Agriculture (USDA), which has been putting pressure on markets.

The USDA has forecast global grain consumption to grow modestly in 2026-27, despite an overall decline in production.

Concerns around droughts and the impacts of an El Nino weather event have added some support to prices.

The Food and Agriculture Organisation of the United Nations (FAO) anticipates a new El Nino phase to begin within weeks, with crops in Southern Africa, South and South-east Asia, and Central America most likely to be hit by droughts.

Jorge Alvar-Beltrán, FAO natural resources officer, said: “This isn’t like previous El Ninos.

“The planet is much warmer today, and with conflict and food insecurity widespread, this new phase will hit hardest in places that are already vulnerable and have limited coping capacity.”

Smaller Russian crop

Black Sea market analysis firm SovEcon has forecast the Russian wheat area at a 12-year low of 88.9m tonnes.

Andrey Sizov, managing director of SovEcon, said: “The lower national crop forecast could lend some support to global wheat prices.

“However, a strong crop in the South, Russia’s key export region, should support active early-season exports and limit upside for Black Sea prices at the start of the campaign.”