What’s the outlook for UK cereals and oilseeds markets?

Large carry-over stocks and high global production levels point towards ample supplies of wheat for the 2023/24 crop year.

In the short term, UK arable markets will continue to be volatile as discussions ramp up on the Black Sea grain deal, which is due for renewal on 18 May.

But speaking at the AHDB’s Spring Grain Market Outlook on Tuesday 25 April, analysts forecast that, in the longer term, El Nino weather conditions in South America will impact global supplies.

See also: EU to provide €100m support to farmers and limit Ukrainian imports

“Wheat carry-over stocks are expected to be high heading into the new season, combined with a relatively large production forecast. Supply does look to be high for the new season,” said AHDB senior analyst, Megan Hesketh.

In the UK, winter grains look like they have the potential to deliver good yields, she added.

May 2023 UK feed wheat futures stood at £191.7/t on Wednesday (26 April), a £14/t discount to the November contract, which opened at £206/t.

Some failed autumn oilseed rape plantings have been replaced with spring barley, which will increase the UK’s barley area overall.

Ms Hesketh outlined supply forecasts in some of the major growing countries for the next crop year:

• Large EU wheat supply, with crop conditions looking good in most countries
• Substantial quantities of wheat have built up in Poland from Ukraine, which will carry over
• Poor winter wheat conditions in the US, but the area is still very large and the weather is improving, so a big crop is expected
• Larger Argentinian wheat area as the weather shifts from dry La Nina conditions towards El Nino.

Oilseeds

The “bears are outweighing the bulls” in oilseeds markets, according to Anthony Speight, AHDB senior analyst.

“Oilseeds markets are relatively well supplied at the moment, and on paper there is nothing to drive oilseeds back up to the high prices of last year,” he said.

“Larger supplies weigh on rapeseed prices, the only thing that is really going to change sentiment is any large weather event or any major changes in the war in Ukraine.”

A large Canadian canola area and record Brazilian crop of more than 150m tonnes, combined with increased EU oilseed production, will lead to a large supply of new crop.