Feed wheat values have slightly increased over the last week are so as £121/T – £122/T ex-farm is offered for spot collection.
Currency, a tightening of Egyptian import specifications and an increase in local short-term demand have all contributed to the buoyancy of the market this week, but there are two main stories which appear to be grabbing the market’s attention this week.
Following 17 months of closure, the Teeside based bio-ethanol plant Ensus is now apparently fully operational. The plant has been up and running since early July and intake has steadily increased over the past couple of months.
According to the HGCA, the plant is one of the UK’s “key grain-based biofuel facilities and since its closure in February 2015 greatly affected regional wheat prices”.
They added that although the re-opening of the plant is a “step in the right direction in terms of boosting domestic wheat usage this season, it should be remembered that Ensus can run on more than once cereal, not just wheat”. In other words, the value of north-east feed wheat will need to compete on price with imported supplies of maize corn.
Elsewhere, according to the French Agricultural Ministry, French wheat production this year was the lowest seen since 1993. Total production is estimated at 28.5 million tonnes this year – this is a significant decline from the 40.9 million tonnes produced last year.
The reduction in production has been attributed to wet conditions during the early summer month’s which is believed to have increased disease risk and thus limited yield potential.
The news has brought this year’s French wheat export campaign into question; local estimates for the current trading season are in the region of 11.4 million tonnes, a 45% decline on the previous trading season.
According to AHDB, France usually accounts for around a quarter of total European wheat production and it is the main European exporter, accounting for almost a third of total European wheat exports.
With reduced export potential from France this season we could see their typical export destinations look elsewhere for supplies, including the UK (that’s if we can compete on price of course).
Also, it is interesting to note that the average specific weight of this year’s French wheat crop is just 73kg/hl, a significant decline on the 79kg/hl achieved last year. A minimum of 74kg/hl is usually required for flour production, which could suggest that France may look to import high quality wheat to meet domestic requirements. This could be good news for milling wheat growers here in the UK.