New AHDB cereal estimates point to weaker prices
© Tim Scrivener UK grain prices are under pressure due to reduced cereals demand for animal feed, increased availability of wheat, and the largest end-of-season wheat stocks since 2016.
The AHDB’s latest UK supply-and-demand estimates for the 2022-23 season show the total availability of wheat is up by 7% on the previous year at 18.61m tonnes.
See also: UK wheat prices fall further due to global supply pressure
Some support to cereals markets will come from extra demand from human consumption and industrial use, with a projected increase of 219,000t year on year, to total 10.57m tonnes in 2022-23.
However, a larger drop in demand for cereals used in animal feed of 335,000t, to 12.78m tonnes for the year, will more than offset this.
The report stated that: “Pig feed production is expected to continue to fall back and so is poultry feed demand.
“Cattle feed demand declined last season and is forecast to remain slow in 2022-23. However, some regions have seen poor forage quality boosting feed requirements.”
Ex-farm spot prices for feed wheat collected by Farmers Weekly on Friday 27 January averaged £218/t, while milling wheat averaged £277/t.
Looking at UK futures markets, feed wheat made some recovery towards the end of the week.
May 2023 contracts stood at £230/t at midday on Friday 27 January, up by £4/t on week-earlier levels, but still down by £11/t compared with the start of the year.
Export focus
AHDB analyst, Olivia Bonser said: “With such a large surplus of domestic grain this year, a big watchpoint is how much we export this season.
“Wheat exports have initially been forecast at 1.15m tonnes, up 639,000t on the year.”
Ms Bonser said to reach this level, the UK would need to export at least 100,000t on average each month for the rest of the season.
Barley
Total UK barley availability for 2022-23 was estimated up by 316,000t year on year, to total 8.42m tonnes, according to the report.
End-of-season stocks for barley are put at 1.16m tonnes, which is up on the previous year, but still in line with the 2019-20 and 2020-21 crop levels.
Feed barley was at a discount of £18/t to feed wheat on Friday 27 January, with ex-farm feed barley averaging £200/t.