Wheat futures fall after hefty MAFF estimate

By FWi staff

MAFF statisticians have weighed in with a hefty provisional estimate of the UKs 2000 wheat harvest, topping the recent NFU forecast by almost 300,000t.

This, together with a rampant Pound, has pushed the wheat market to new contract lows.

The ministry survey suggests UK farmers will have cut 16.8m tonnes of wheat once harvest is finally finished, 2m tonnes more than last year and beating the previous record by 700,000t.

The figure assumes an average yield of 8.05t/ha (3.26t/acre).

Even if output is eventually revised downwards, there is still likely to be at least 1.5m tonnes more wheat available for export than last year, a total of about 4.5m tonnes.

That, together with a further 1% gain by sterling over the Euro this week, has weighed heavily on the market.

November futures fell below 60/t on Wednesday, leaving farmers facing ex-farm prices of 57-58/t, says the Home-Grown Cereals Authority. And merchants report a flat forward market.

Although the general quality of the crop is good, the main unknown is how new customers will value UK wheat against better known US and French supplies, says the HGCAs Gerald Mason.

“Samples are being sent all over the world, but we wont know for a while where we can peg ourselves on price.”

The main hope is that the world market continues to strengthen, which could then lift UK prices, he adds.

MAFFs barley output estimate is close to NFU and trade figures at 6.7m tonnes.