UK wheat exports struggle to compete on global stage
© Tim Scrivener An oversupplied domestic market and limited export competitiveness is making UK wheat look fairly bearish in the short term, despite a more favourable exchange rate.
Feed wheat futures dropped to £184/t midweek for the November contract, down £8/t on week-earlier levels.
Traders at ADM Agri said there had been some support for ex-farm prices due to sterling being weaker, but the UK’s export potential continues to be hindered by cheaper quotations from the EU and Black Sea region.
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The EU wheat crop estimate was cut by 800,000t to 125.3m tonnes by the EU Commission on 28 September, but the EU is still forecast to achieve record export volumes.
Larger quantities could come to the market from the US as well, with the US Department of Agriculture (USDA) increasing its projected wheat production to 49.3m tonnes.
It has also confirmed sales by private exporters of 220,000t of US wheat to China during the 2023-24 marketing year.
Meanwhile, in South America, dry weather is having an adverse effect on crops and could offer some support to the market.
Milling wheat premium
Spot prices collected by Farmers Weekly on 4 October averaged £177.8/t for feed wheat and £242.5/t for milling wheat.
Despite weak demand for feed wheat, concerns about quality in the EU have been supporting milling wheat prices.
The milling premium over feed wheat has grown from £45/t this time last year to more than £60/t at the moment.