Low proteins could make wheat marketing a challenge

Low proteins look like presenting a marketing challenge for the 2022 milling wheat crop.

Merchants report variable quality between regions and soil types, with Group 1 wheats generally failing to make the required 13% protein breadmaking spec.

Hagbergs and bushel weights are not an issue in most cases.

At farmer co-op North Herts Farm Grain, trader Richard Strzelecki said: “Protein is the story of the year. On average they are coming in at least half a percentage down on last year. Trading to millers is slow and has been for months.”   

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Millers are well covered for now, with the early harvest taking all in the chain by surprise, with many merchants still moving old-crop wheat last week.

Most will accept breadmaking samples down to 12.5% protein, traditionally with a penalty of £1/t for each 0.1% point below 13%. Some charge more, but may offer a slightly higher initial price.  

The scale of penalty charges and what millers will accept is likely to develop as more becomes known about the crop overall.

Variability

Kevin Anderson, managing director of East Yorkshire-based Anderson Grain, said some samples from bodied sand land were making 13% protein and yielding well, but yields and protein were very variable generally across the higher-yielding soil types.

Protein is being diluted by yields, he said, with the determinant on decent protein levels appearing to be the ability of the soil to retain moisture.  

Field-by-field variation in quality makes it all the more important to have good data on what is in farm stores.

“Make sure you know what you’ve got – the variability means that if you have a sample of a bulk made up of several fields, that could produce a dangerous average.”

Biscuit wheats were producing some worryingly low proteins, said Mr Anderson. “Where we would expect to see 10.7%, we’re seeing in the high 9s and low 10s.”

With quality uncertain, growers with good samples are holding on for now, so there is little new buying aside from where there is harvest pressure from lack of storage, or the need for cashflow.    

Grain market dynamics

Global grain market movements have been prompted by conflicting factors, including hot, dry weather in the US affecting grain quality and yield prospects, with similar pressure reducing the outlook for the French maize crop.

Conversely, fears of recession in many countries, higher interest rates, lower oil prices and doubt over Chinese demand for grain imports have provided downward pressure.

These resulted in daily movements of up to £5/t either way in the November 2022 London feed wheat futures contract in the week to Wednesday 10 August. Midweek, the contract was at £267/t.

“The next four weeks are still critical for maize production in both the US and Europe, and the market will continue to focus on this,” said market analyst CRM.

“If we do have further reductions in maize output, especially in the EU, we could see an increase in wheat consumption at a time when the wheat balance sheet cannot afford it.”

While 11 vessels have sailed from Ukrainian ports so far, carrying mainly maize, the trade remains unconvinced on the scope for large volumes to move in the near term. This provides a further element of market uncertainty, although decent volumes are still moving by rail.

The next US Department of Agriculture World Agricultural Supply and Demand Estimates report is due on Friday 12 August and is likely to move the market.