Wheat prices in the UK have climbed back up this week, following bullish reports from global grain markets.
London’s November 2021 feed wheat futures opened at £191.00/t on Friday 17 September.
The contract closed last week (10 September) at £183/t, lower than anticipated following the USDA’s world agricultural supply and demand estimates (WASDE) report suggesting a larger than expected US maize crop. Prices have since risen by £8/t.
Farmers Weekly spot prices averaged £180/t ex-farm for feed wheat on Friday, a £7/t increase on the previous week.
Victoria Godsall, business development manager at Graindex said: “In the South feed wheat has traded at £185.00/t for October ‘21 ex-farm on Wednesday and milling wheat (Group 2) KWS Chilham traded at £212.00/t for October ‘21 ex-farm yesterday.
“Accurate sample analysis on all varieties of wheat will be of significant value this year, as we see buyers taking full advantage of the premium markets.”
What’s driving these prices?
Key market drivers during the last week have been tightening global supplies, with lower production announced in Canada and Russia.
Wheat production estimates were cut by Statistics Canada to 12.7m tonnes on Tuesday 14 October.
The estimated Russian wheat planted area has also dropped back from earlier predictions.
Helen Plant, senior analyst at AHDB, said UK feed wheat futures climbed with reports that Russian farmers could plant less winter wheat for harvest 2022. Planting of winter grains in Russia is slower than last year due to dry weather.
Looking at US wheat markets, Storm Ida had been impacting US wheat exports, however the USDA’s most recent weekly export report showed an increase in US wheat export levels.
The French harvest has struggled with quality concerns for wheat. According to ADM, only 25% of the crop is hitting the minimum requirements for the Matif milling wheat futures specification.
Looking forward, the US Climate Prediction Centre predicts a 70-80% chance of La Niña, which could have an impact on harvests in the southern hemisphere in the coming months.
The AHDB harvest progress report, dated up to 7 September, showed winter wheat at 90% complete, with yields estimated at between 8.1t/ha and 8.3t/ha.