The Grain Column with Emma Croft

Emma Croft, farm trader at Anderson Grain Marketing Ltd.
Emma Croft, farm trader at Anderson Grain Marketing Ltd.

The last seven days have brought yet another volatile week to ex-farm wheat values despite the lack of movement evident within the London wheat market.

Feed wheat has continued to fluctuate between £140/T – £143/T ex-farm for no reason other than sporadic buyer demand. Milling wheats have done the same – both full specification group 1 varieties and all soft wheat varieties have seen a wide difference in price range over the last week or so.

Buyers are relatively quiet further forward but small opportunities to fulfil spot contract shorts are good value.

Following on from DEFRAS’s release of this year’s Early Bird Survey at the beginning of the month, AHDB have published some early predictions for this year’s harvest.

They added that “should yields be similar to the past five year average of 8.2 tonnes per hectare, UK wheat production should be somewhere in the region of 14.4 million tonnes this year”.

At this level, the early forecast for UK wheat in 2018 would be down 3% on 2017. This early scenario also represents a decline of 470,000 tonnes of wheat on the five year production average.

“On a five year maximum yield scenario, using the 9.2 tonnes per hectare achieved in 2015, wheat production in 2018 could top 15.7 million tonnes. However, this is still around 800,000 tonnes lower than the production levels seen in 2014 and 2015. Alternatively, on a five year minimum yield scenario, using the disappointing 2013 yield of 7.4 tonnes per hectare, production could stand at just 12.9 million tonnes.

Although it is early days yet, the above numbers certainly make interesting reading. Perhaps we could see a relatively tight supply scenario next season?

Meanwhile, and according to the latest trade data from HMR&C, UK maize imports for this season to date (July to November) were the highest on records going back to 1992/1993.

Looking more closely, in November, almost 182,000 tonnes of maize was imported, a drop of 36% from the season-high level of 285,000 tonnes imported in October. With regard to import origins, France and Romania were key suppliers during November, with import volumes of 63,000 tonnes and 50,000 tonnes respectively.

But why are we seeing higher maize imports?

Part of the reason for higher maize imports seems to be from increased animal feed demand. The amount of maize used to produce animal feed within both retail feed compounders and integrated poultry units is up this season on last year.

So far in the current trading season, 138,000/T of maize has been used for animal feed, up 13% from last year. Another reason for increased maize imports could be to do with the bio-ethanol sector but this is yet to be confirmed.