Global wheat stocks cut as grain prices stay depressed

Despite a brief rally, UK grain markets ended the week to Wednesday relatively unchanged, with spot feed wheat at about £107/t ex-farm. Feed barley improved slightly, to around £102/t, while Group 1 milling wheat premiums widened to nearly £42/t over feed, depending on location.

Defra’s latest estimate put UK wheat production at 16.6m tonnes, leaving an exportable surplus of about 3.5m tonnes, said David Sheppard at Gleadell Agriculture. “Given that total exports are estimated at about 300,000t by the end of September, that would leave the UK in need of a huge shipping campaign during the last nine months of the season, against the bearish background of growing EU and global coarse grain supplies.”

See also: UK wheat production up 39% on 2013

Although UK milling wheat quality was ideal for export, the strong pound was likely to hamper EU trade.

The latest USDA report surprised markets by cutting both US and global wheat stocks, but grain prices remained depressed.

While record wheat consumption led the USDA to cut its 2014-15 global ending stocks estimate by 3.8m tonnes, they were still plentiful at 192.6m tonnes. Coarse grain ending stocks were 2.2m tonnes higher, at almost 226m tonnes.