Feed wheat falls back below £200/t
© Tim Scrivener Wheat exports are struggling to find a home, according to traders, and limited domestic demand for feed wheat is also weighing on UK prices.
Grain merchant Frontier said the UK was likely to be left with a significant carryover into the next crop year.
Simon Ingle, head of grain pool marketing at Frontier, said: “Export opportunity is limited because of cheap Ukraine wheat supplies being offered into traditional UK export destinations, such as Spain.
“With concerns the Black Sea export deal will not be renewed in May, there is a push to ship as much grain as possible before the deadline.”
See also: Grain prices help profits rise to £39m at Frontier Agriculture
The gap between old crop and new crop has been extending in recent weeks, with a £15.50/t premium for new crop midweek.
UK feed wheat futures opened on Wednesday 12 April at £194.50/t for the May 2023 contract, while November 2023 futures opened at £210/t.
Spot prices collected by Farmers Weekly averaged £185.94/t for feed wheat and £244.37/t for milling wheat on 12 April.
Global picture
Large global supplies of wheat and cheap exports from the Black Sea region provide a fairly bearish forecast for wheat in the short term, but there are some early signs of support.
The US Department of Agriculture (USDA) global outlook for wheat suggests increased supplies, higher consumption and reduced trade and stocks for 2022-23.
Increased export volumes from Russia and Ukraine have been more than offset by a reduction in exports from the EU, Argentina, and Brazil, according to the USDA’s latest World Agricultural Supply and Demand Estimates report on 11 April.
Market support
The USDA expects China to import about 12m tonnes of wheat this year – its highest volume of imports in almost 30 years and making it the leading 2022-23 global importer of wheat.
Short-term support to global markets was also provided this week when about 50 vessels in the Black Sea were held up on the way to Ukrainian ports because the Joint Coordination Centre could not conduct inspections of vessels.