Old crop demand boosts milling wheat premiums

Milling wheat premiums have jumped sharply on strong demand for tight old crop supplies, with new crop premiums also widening as a result.

As Farmers Weekly went to press, Group 1 milling wheat was fetching about £191.50/t ex-farm for spot movement – £5/t up on the week and widening the premium over feed from £40/t to almost £49/t. Harvest prices were pegged at around £153/t – a £29/t premium compared with £21/t last week.

In the US, milling wheat markets were well supported due to low yields and quality, as heavy rains followed the dry spring, said a report by analyst Agritel. However, favourable weather for maize development, combined with the large South American crop, meant maize prices were under pressure.

With the European harvest under way, UK feed wheat values continued to drift lower, not helped by sterling reaching an 18-month high against the euro. Spot London wheat futures fell below £140/t for the first time in four years, with November futures dropping by £4.55/t in the week to Tuesday, to close at £136.20/t.

The one potential supportive factor was continuing dry weather in Australia, said a report by HGCA. “The possibility of an El Niño weather event is a major risk factor.”