With the damage to Russian cereal crops worse than first estimated, it has offered further support to grain prices.
The latest AHDB Grain Market Report shows Nov-24 UK feed wheat futures gained further after the May Spring Bank Holiday to stand at £222.00/t.
Regional consultancies, IKAR and Sovecon revised their Russian wheat crop estimates downwards to 81.5 Mt and 82.1 Mt respectively following the pressure from dry weather and frost. In addition, on May 26th the USDA’s winter wheat rating dropped one percentage point to 48% good-to-excellent, contrasting the average analyst expectation of no change on the week. Also, in the latest EU MARS report, the EU’s soft wheat yield was lowered on the month from 5.93 t/Ha to 5.92 t/Ha.
Some profit taking has pulled prices back slightly from where they stood in the middle of the week and with rain forecast for Russia and Ukraine it could weigh on the markets.
Latest UK supply and demand estimates
Earlier in the week the AHDB published the latest UK supply and demand estimates for wheat, barley, maize and oats for the 2023/24 season. Overall, few changes were made to UK usage estimates, with total cereals domestic consumption revised up just 6 Kt from the previous estimate.
However, adjustments to import and export figures for wheat, barley and oats all contributed to a realignment of what will be carried into the 2024/25 season.
Wheat
Wheat imports are expected to remain firm for the remainder of the season. The report suggests this is due to the limited availability of domestic milling wheat, and the relative price of imported wheat. As such, wheat imports are estimated to reach 2.175 Mt this season, up 60% on 2022/23 levels. This is the highest since the 2020/21 season, following the poor harvest. To date (Jul-Mar), imports have totalled 1.637 Mt, up 63% on the year.
On the other hand, wheat exports are forecast at 225 Kt, down 86% on the year. This is the lowest since the 2020/21 season and is well below the five-year average of 774 Kt. So far this season (Jul-Mar), wheat exports have totalled 195 Kt, down 83% on the same period last season.
With a high level of wheat expected to still be on farm, plus the level of imports expected to be carried over for milling, and minimal exports, commercial end-season stocks therefore are estimated to sit at 3.045 Mt. This is up 1.093 Mt from 2022/23 levels, and if realised would be the highest level of ending stocks this century. Though this is perhaps unsurprising given the concerns over the 2024 wheat crop, and what will be required to fulfil next season’s demand.
Barley
Barley imports are estimated at 145 Kt, up 64% on the year, and above the five-year average of 81 Kt. The majority of these imports are expected to be of feed quality.
So far this season (Jul-Mar), barley imports have totalled 131 Kt, up 137% on the same period last year. The report anticipates some drop off in pace for the rest of the season.
Much like wheat, barley exports are minimal, estimated at 730 Kt, down 35% on the year and below the five-year average of 1.166 Mt. From July to March, exports totalled 625 Kt, down 29% on the year.
Slightly lower forecast domestic consumption, combined with minimal exports leaves commercial end-season stocks at 1.431 Mt. If realised this would be up 13% on the year and the highest stocks level since 2014/15.
Oats
Despite a much smaller-than-average crop this season, the latest supply and demand figures suggest oat imports will fall 26% on the year at 13 Kt in 2023/24.
On the other hand, oat exports are forecast to reach 130 Kt. While this would be down on the year, it would be the second highest level of oat exports since 2002/03, behind only last season.
Despite sluggish domestic consumption, limited availability and historically high exports, commercial end-season stocks are forecast at 55 Kt. If realised this would be the smallest figure since 2005/06.
Rapeseed prices rise too
Over the same period, Paris rapeseed futures climbed further too, currently the Nov-24 contract stands at €500.75/t.
Support in European rapeseed markets followed Chicago soyabean oil and Canadian canola futures. This was despite pressure on Chicago soyabean futures as the latest USDA weekly crop report showed above average soyabean planting progress in the US.
