Wheat prices fall due to global supply pressure
© Tim Scrivener UK feed wheat prices have dropped by £16/t on the week, opening at £235/t on 10 January for May 2023 contracts.
This is in keeping with wider global trends, with both Paris milling wheat futures and Chicago futures down on week-earlier levels.
Global markets are being driven by an increase in supply of exports from Russia, with consultancy firm SovEcon forecasting Russian wheat exports in January at about 3.6m tonnes.
See also: Slow grain trade sees values creep down further
Demand uncertainty in China due to lockdown restrictions has also been putting pressure on markets, with it being a major global importer.
AHDB has also forecast a slightly bearish outlook for wheat in the next two weeks, with a record wheat crop in Brazil expected to leave a large exportable surplus, which may add further pressure to prices.
However, poor crop conditions in the US should offer some support to global markets in the longer term.
Sophie Whiteman, farm trader at Frontier, said that the Australian harvest continues to swell, with the Australian Bureau of Agricultural and Resource Economics and Sciences putting that country’s wheat crop at a new record for the second consecutive year, totalling 36.6m tonnes.
Milling wheat premium
The gap between milling wheat and feed wheat has been growing in recent months, with milling wheat currently at a £57/t premium, compared to a month-earlier gap of £42/t.
Ex-farm milling wheat prices collected by Farmers Weekly on 6 January averaged £285/t and ranged from £274/t in Hampshire to £297/t in the West Midlands for January collection.