UK grain markets near £180/t and forecast to stay firm

Ex-farm wheat prices have lifted from August lows during September and are trading roughly in line with the same week last year.

Analysts have forecasted wheat prices to stay supported in the coming weeks due to cuts to supply in several major producing regions, including Russia and the EU.

Prices collected by Farmers Weekly on 18 September put ex-farm milling wheat at £231.1/t and feed wheat at £178.3/t.

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Simon Ingle, head of grain pool marketing at Frontier said UK domestic prices continue to reflect the cost of imported milling and feed wheat supplies.

Mr Ingle added: “The small UK crop – over 3m tonnes down on the year – leaves farmer selling at a slow pace, which is not helped by low protein and admixture issues.

“Immediate delivery prices for some grades are as good for September as they are for any position before the new year.”

UK feed wheat futures opened at £183.95/t for the November contract mid-week, in line with levels from a week earlier.

James Wright, commercial director at flour millers Wrights said the physical market in the UK remains slow, with limited buying and selling: “Challenges continue, with lower proteins on the Group 3 and 4 wheats, and this season’s ergot problem.”

The UK wheat harvest was 95% completed by 11 September, according to AHDB’s latest harvest progress report.

Yields have averaged 7.42t/ha, which is 8% down on the five-year-average, and protein levels for Group 1 were about 12%.

Global drivers

A Russian missile strike on a Ukrainian grain vessel in the Black Sea last week pushed up global grain markets on 12 September as tensions between Ukraine and Russia flared, but prices have since settled back.

Storage and transportation infrastructure at Odesa grain terminals in Ukraine were also reportedly damaged by missile attacks on 14 September.

Traders at Dewing Grain said any disruption in the Black Sea area provided an “obvious choke point” for both Russia, the world’s top wheat exporter, and Ukraine, but added that there was still evidence of strong grain flows out of the region.

Andrey Sizov, head of market analysis firm SovEcon, said the pace of sowing in Ukraine was slow this year due to dry and hot weather.

He added: “Ukraine’s exports of grains and oilseeds in the first half of September totalled 2m tonnes, down from 2.5m tonnes the previous month.”

Looking at a global perspective, the US Department of Agriculture’s report on 12 September, World Agricultural Supply and Demand Estimates, cut its 2024/25 wheat production estimate, which added some more support to markets.

Strategie Grains revised its EU-27 wheat crop estimate down by 2.1m tonnes to 114.4m tonnes, driven by reductions in France and Germany.

Market analysts at Expana said Germany had faced similar wheat quality issues to the UK, and the industry had pegged German wheat production at between 18m-19m tonnes.