Grain prices have weakened this week in a mixed picture for harvest outlooks and results.
The 2020 London November feed wheat futures contract was at £163.25/t at lunchtime on Friday (7 August), down about £2.60/t on its previous week’s close.
Ex-farm harvest values lost a similar amount on the week, with the average August feed wheat price collated from regional merchants by Farmers Weekly at £159/t. Feed barley averaged £120/t ex-farm for August.
While reducing European crop estimates are providing some support, the Russian wheat harvest is turning out better than expected. Alongside this, a sinking US dollar and an improving yield outlook have made maize even more competitive.
At the same time, hopes are rising for a better-than-expected performance from the US spring wheat crop.
Some traders and analysts are cautiously raising their estimates for the UK crop, which had been expected to yield only 10m-11m tonnes against last year’s 16m-tonne bumper harvest. However it’s a very mixed picture on yield and there is a long way to go.
Lower French crop
France cut its soft wheat crop forecast by 1.6m tonnes to 29.7m tonnes this week. Bad autumn and winter weather combined with the smallest area since 1994 are the main reasons for the expected 25% cut in crop size compared with 2019.
Russian wheat is increasingly competitive in export markets, while France has been exporting barley at a sharp rate, with feed and malting quality shipments in July totalling 447,000t to China alone, according to AHDB figures.
“In the UK, harvest activity is slowly progressing northwards, eroding some of the recent delivery premiums,” said Jonathan Lane, ADM Agriculture’s head of grain trading.
“However, apparently limited demand is matched by limited selling.”
Declining European wheat crop estimates alongside grower reluctance to sell has supported cash premiums to some extent.
UK rapeseed prices have reduced very slightly on a firmer pound, with ex-farm values for August averaging £326.60/t on Friday.