Wheat prices show welcome signs of improvement

Feed wheat prices have shown an encouraging upturn in recent days, prompted by tightening supply predictions and interruptions to shipping in the Black Sea region.

Latest reports from the US Department of Agriculture (USDA) put US wheat production for 2026-27 at 41.8m tonnes – the lowest since 1970-71 and nearly 5% down on last month’s estimate.

Taken alongside a reduced Canadian crop – and higher global demand – ending wheat stocks are forecast to drop by 2.6m tonnes, to 272.8m tonnes, said the USDA.

It estimated total global coarse grain production to fall 2.5m tonnes, month-on-month, to 1.59bn tonnes, with ending stocks also shrinking.

Partly behind this is a decline in maize conditions across the EU. In France – which produces more than a fifth of the EU’s maize – the crop is much further ahead than it should be due to the dry conditions.

Current estimates suggest the country’s maize harvest will be 10m tonnes (26%) below the five-year average and the lowest since 1990-91.

“We estimate the maize harvest will be down by 40% across the EU, which inevitably will push up wheat prices due to increased demand to fill the gap for feed,” said Sebastien Mallet, an analyst at ODA

Ukraine attacks

The warmer weather isn’t the only thing affecting the wheat price.

Ukrainian attacks on vessels in the Sea of Azov have led to shipping restrictions by Russia – which has enjoyed a decent wheat harvest, alongside Ukraine.

“This is significant, as a quarter of Russia’s grain exports leave via this route, explained Mr Mallet.

“As export capacity decreases, we anticipate bottlenecks and therefore increased prices, but it really is a day-to-day watch.”

Prices 

Following the USDA report, nearby Chicago wheat futures jumped by almost 10%, from $221.56/t (£165.40/t) on 10 July to $243.55/t (£181.82/t) on 15 July.

London’s November wheat futures followed suit, rising from £180.50/t on 9 July to £190/t on 15 July.

Spot feed wheat values averaged £174.60/t ex-farm for as-available harvest movement on Wednesday 15 July, up from £170.50/t the week before.

Group one milling wheat prices rose from £187.50/t to £195.50/t over the same period, while feed barley eased from £144.80/t to £143.60/t, possibly due to downgraded malting barley weighing on feed markets.

UK harvest

With combines now well into the UK wheat crop, yields have been mixed, says Mr Mallet.

“Light or stony land is averaging 4-6t/ha, but heavier land is faring better. ODA is currently basing markets on [a predicted UK crop of] 13-14m tonnes, which is better than last year, but 2-3m tonnes lower than early spring expectations.”

The early harvest is not unique to the UK – it is also true across the northern hemisphere. However, some parts of the EU managed to get their harvests gathered ahead of the recent hot weather.