Milling wheat gains and regional price spread widens

Milling wheat gained most among grains this week, rising by about £2.50/t in the week to Friday (25 November) to average just over £142/t ex-farm for December.

The regional price range has widened to more than £20/t, from £135/t for full-spec breadmaking samples in the Dorset and Wilshire area to £157/t in Yorkshire and the North East, where the draw of the ethanol plants as a home for feed wheat is also pushing up milling wheat prices.

However UK milling premiums, at an average £9/t on full spec December grain, remain under pressure due to the quality of the 2016 harvest which has the highest proportion of wheat meeting milling specification in 13 years.

See also: Britain’s Brexit bubble bucks global grain trend

Feed wheat put on about £1/t to average £132/t for December, with the regional spread also widening, to between £126/t (North East Scotland) and £142/t in Yorkshire.

EU wheat exports have reached 9.4m tonnes so far this season, 9% higher than last year, but the relatively strong pound kept UK wheat uncompetitive.

It was home demand which kept price pushing slightly up this week.

UK feed wheat export values reached their highest premium over US maize in 17 months, said AHDB Cereals & Oilseeds.

Feed barley was steady at an average of £116/t ex-farm for December.

Factors pushing prices grain prices down:

  • A 2017 global maize production forecast up 7m tonnes on the month to 1.04bn tonnes (971m tonnes in 2016) from the International Grains Council (IGC)
  • IGC prediction for 2017 wheat production to rise to 749m tonnes against (37m tonnes in 2016, with total grain stocks rising to 504m tonnes compared with 475m tonnes in 2016)
  • A 1m ha rise in the Russian winter cereals acreage to record high of 17.3m ha (14m ha of winter wheat)
  • Australia’s expectation of a large wheat crop at 28-30m tonnes with harvest 40% complete
  • Argentina expecting a five-year high in wheat output.

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