Analyst insight: 2024/25 wheat imports to match 2012/13 levels?

• Nov-25 UK feed wheat futures fell £0.45/t yesterday to close at £179.70/t.
• Domestic wheat markets declined despite an increase in global markets. The main reason for this was sterling strengthening against both the US dollar and euro yesterday. Chicago wheat and Paris milling wheat futures (Dec-25) both gained 0.2%. Chicago wheat futures were supported by decreasing US winter wheat crop rating.
• Nov-25 Paris rapeseed futures fell €5.00/t (-1.0%) to close at €485.25/t yesterday. Paris rapeseed futures followed the global oilseed market down, with prices now trading below the strong support level of €490/t. Winnipeg canola and Chicago soyabean futures (Nov-25) both fell by 1.2% yesterday.

Sign up to receive the Weekly Market Report and Grain Market Daily from AHDB.

Today, AHDB published the latest UK cereal supply and demand estimates for 2024/25. These are the last estimates for the season before the final balance sheet for 2024/25 is published in September when full season data is available.

For wheat, higher than originally expected imports, lacklustre demand and very steady exports, has led to further upward revisions to closing stocks.

Wheat imports to reach nearly 3 Mt

Compared with March’s estimates wheat imports have been revised up by 200 Kt to 2.9 Mt (with a large proportion being high quality, milling spec), as the pace of imports has remained higher than previously anticipated. If realised, this will be the second highest full season volume imported by the UK on record, behind 2012/13 when just shy of 3 Mt was brought in.  2012 a year that is etched in the history books for arable farmers and industry in the UK as being up there amongst one of the worst in recent history.

Going back to this season and the 2024 harvest, yes the crop size was down on the year, and it was a challenging production year and yes output was lower than in 2012. But can we really compare the quality of the 2024 crop to 2012 and justify a similar volume of imports, when total demand for wheat this season is forecast at the second lowest level since 2011/12?

Lacklustre demand and hefty stocks

From a demand perspective, with a smaller domestic crop, maize and barley have crept into feed rations this year at a higher rate than is typical. Also, the total amounts of cereals included in rations has come down this season. Demand from flour millers is expected to be slightly down this season too. Not to mention the use of wheat by the bioethanol sector – that has continued to drop throughout the season, with lower prices and cheaper bioethanol imports weighing on the viability of UK production. Going forward with the current proposed US-UK trade deal, the bioethanol sector will come under further pressure, possibly jeopardising a UK demand source.

The balance of supply and demand this season is forecast at 3.187 Mt, which is roughly inline with the previous five-year average. With the very steady export campaign the UK has had this season, full season exports are forecast at 250 Kt. This means that end-season stocks are expected to be around 3 Mt for another season. A large proportion of that is expected to be imported stock.

What’s in store for 2025/26?

Looking ahead to 2025/26, production is expected to be higher this harvest driven by a larger area. However, how large the area increase is and the impact of the dry spring on yields is yet to be fully assessed – are we out of the woods with the recent much needed rains? Only time will tell. In theory we are likely to have a larger wheat harvest this season. That combined with heavy carry-in stocks is going to lead to ample supplies. While the barley crop is expected to be smaller this harvest, due to a reduction in area (likely giving some animal feed demand back to wheat), the demand picture initially isn’t looking that dissimilar to this season. Bioethanol demand will remain a key watch point with the UK-US trade deal rumbling on, and also having potential to impact cattle markets, which could affect feed demand. Again, the wheat balance sheet could really do with poultry and pig feed demand picking up.

Opinion

What to draw from this? Arable farmers have been living in somewhat unprecedented times for around five years now, with various challenges outside of all our control having significant impacts on production and markets. Now more than ever, accurate and timely information is vital to aid in making the best decisions for your business and not least from a national level, ensuring UK food security. As an example, if there was more timely trade data from HMRC, could the crash in milling premiums have been pre-empted and better marketing decisions been made? Likewise, would as much have been imported if it was known how much was being brought in? While these are just my musings and trade data is one example, in the volatile world we are living in, there has never been a more important time to have and use data.

AHDB are in discussions with HMRC and Defra about how we can improve the current data availability.

Sign up to receive the latest information from AHDB.

While AHDB seeks to ensure that the information contained on this webpage is accurate at the time of publication, no warranty is given in respect of the information and data provided. You are responsible for how you use the information. To the maximum extent permitted by law, AHDB accepts no liability for loss, damage or injury howsoever caused or suffered (including that caused by negligence) directly or indirectly in relation to the information or data provided in this publication.

All intellectual property rights in the information and data on this webpage belong to or are licensed by AHDB. You are authorised to use such information for your internal business purposes only and you must not provide this information to any other third parties, including further publication of the information, or for commercial gain in any way whatsoever without the prior written permission of AHDB for each third party disclosure, publication or commercial arrangement. For more information, please see our Terms of Use and Privacy Notice or contact the Director of Corporate Affairs at info@ahdb.org.uk  © Agriculture and Horticulture Development Board. All rights reserved.