Wheat slips to £160/t as harvest approaches

Domestic wheat markets remain under pressure, with a bearish global outlook and exchange rates making imports even more competitive versus UK grain.

The spot price for ex-farm feed wheat collected by Farmers Weekly midweek stood at £157.2/t, while milling wheat averaged £182/t.

Meanwhile, UK wheat futures fell to new contract lows in the past week and opened at £177.5/t on 9 July for the November contract, with wheat struggling to find support within the marketplace.

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The strength of UK sterling compared with the US dollar has limited export volumes, exacerbating the wider bearish trend.

Given the volatile global outlook, some traders have advised growers to mitigate potential exposure to markets by selling a greater percentage of new crop forward.

Crop development

Larger grain stocks and harvest progress in the US have put further pressure on global markets, however forecasts of rainfall across key growing regions in the US could impact quality.

Meanwhile, Russia’s spring wheat area could decline by up to 4% on the year, according to Ben Barritt, market reporter at insight firm Expana.

He said: “The current estimate places total planted area at 11.8m hectares, which could mark the smallest area in over a decade.”

Mr Barritt added that despite the reduction in spring wheat area, the market remained broadly optimistic about the 2025-26 harvest, with total Russian wheat production estimated at upwards of 82.8m tonnes.

Black Sea market analysis firm SovEcon forecast Russian wheat production at 83m tonnes, with exports accounting for roughly 43m tonnes of this.

Andrey Sizov, managing director at SovEcon, said: “Active wheat exports from the Black Sea region will weigh on global prices.

“Ukraine may also become a more active competitor, as it needs to redirect more wheat to non-EU destinations in 2025-26.”

Europe

Combines are starting to roll across parts of the Europe and trade association Coceral’s latest estimate has put wheat production (excluding durum) at 143.1m tonnes for the EU-27 plus UK, up from 126.3m tonnes last year.

The dry spring and droughts across parts of the UK are expected to impact domestic production, with yields likely to be lower in some regions.

The latest industry crop condition report, collated by Adas, indicates that less than 40% of UK winter wheat crops are in either excellent or good condition, compared with 56% this time last year.

Concerns for the future of the UK’s bio-ethanol sector are also starting to trickle into prices with the wheat premium in the North East, close to production facilities, falling to roughly £10/t.

However, analysts at CRM-Agri pointed out that the impact could have been more significant if Vivergo had been running at full capacity and both plants were sourcing only domestic crops.