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Is there support for UK grains? Grain Market Daily

Wednesday, 2 October 2019

Market commentary

  • The surprising USDA stocks report released on Monday continued to boost US grain and soyabean markets yesterday.
  • Chicago soyabean prices hit their highest point since 15 July yesterday (read more here). However, prices have since retracted slightly this morning.
  • UK wheat futures (Nov-19) bucked the upward trend seen recently closing £0.25/t down yesterday, at £138.75.
  • The second provisional release of the AHDB’s cereal quality survey has confirmed the concerns around HFN’s deteriorating on the later harvested crop.

Alice Bailey

Senior Analyst

Is there support for UK grains?

UK feed wheat futures (Nov-19) stopped their upward trend yesterday. There has been some recent support in global grain markets from weather concerns and also a bullish stocks report released by the USDA on Monday.

Starting with weather, there have been adverse conditions in both the US and Canada, both of which are currently harvesting. US harvest of hard red spring wheat was 9 percentage points behind average as of 29 September. Canadian harvest is also behind average due to snow.

Australia, another key wheat producer is also experiencing adverse weather in the form of dryness. If the dryness is prolonged as they approach harvest the effects of this on yields will be one to watch.

Moving onto the USDA stocks report, wheat stocks were slightly above expectations at 64.9Mt. However, corn stocks came in well below the trade expectation. The report pegged US corn stocks at 53.7Mt (as at 31 August) which was well below the 61.7Mt estimated by analysts in a pre-report Reuters’ poll. This bullish news pushed US corn futures (Dec-19) up $6.50/t on Monday.

As global grains are pushed higher it could continue to offer support to UK grains. However, 2019 harvest has provided a large UK cereal crop. Along with this Brexit uncertainty continues, having entered October there is still no apparent development towards a Brexit deal. 

Cereal Quality Survey

The latest results of the AHDB cereal quality survey were released yesterday. As expected, later harvested wheat has been negatively affected by rainfall with average Hagberg Falling Numbers (HFN) declining. Although the average is still above 300 seconds, the range for group 1 samples is 169s to 437s. Protein and specific weights have also dropped, but only slightly compared to the first release.

For the full set of results including information on barley quality visit our Cereal Quality Survey page on the website.

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