Milling of imported wheat remains above average: Grain market daily

• UK feed wheat futures (May-25) closed at £186.00/t yesterday, rising £1.65/t from Wednesday’s close. The Nov-25 contract also gained £1.65/t over the same period, to close at £188.00/t.
• Russia’s deputy prime minister announced that Russian winter crops (inc. winter wheat) are in poor condition due to deficit soil moisture for some areas and may need to be replaced by spring crops. In addition, heavy rainfall during Australia’s wheat harvest has led to a deterioration in quality, lending support to European wheat markets too.
• In the latest monthly crop monitor report by GEOGLAM Crop Monitor, while wheat conditions are reported to be mixed globally, the outlook has improved since last month and is better than this time last year.  
• Paris rapeseed futures (May-25) closed at €522.00/t yesterday, gaining €3.75/t from Wednesday’s close. The Aug-25 contract rose €1.25/t over the same period, to close at €476.25/t.
• Statistics Canada reported Canada’s rapeseed harvest for 2024 at 17.8 Mt, lower than the 19.0 Mt estimate released in November and the 2023 harvest of 19.2 Mt, supporting Paris rapeseed futures. Lower production in 2024 was reportedly due to both lower yields and planted area.

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AHDB’s latest UK human and industrial (H&I) usage shows that since the start of the 2024/25 marketing year (July), total wheat milled has reached 2.0 Mt by the end of October. While this is 8.1% less than the same period last year, it is broadly in line with the five-year average for the same period of time (-0.9%). Firmness in the volume of wheat being milled has been supported by elevated wheat imports as domestic wheat usage has subsided due to a smaller crop with lower protein levels.

Greater percentage of imported wheat milled than domestic

Use of imported wheat began to rise in the months leading up to the 2024/25 marketing year as some mills took on greater volumes in preparation for the smaller UK milling wheat crop and concerns regarding quality.

Post harvest, despite the quality of the UK milling wheat crop exceeding anticipations of some, elevated imports of milling wheat has continued into the 2024/25 marketing year; which has been driving pressure on the milling wheat premium. As a result, the percentage of home-grown to imported wheat milled has differed from historical trends, with imported wheat making up a much larger share.

Firm overall demand but lesser domestic usage

While the continued elevated use of imported milling wheat into this marketing year helps support the availability of milling wheat for domestic millers and therefore satisfy demand, this is also weighing on the domestic milling wheat premium. UK trade data for October 2024 is due to be available next Friday (13 Dec).

In the latest AHDB supply and demand balance sheet, H&I usage of domestically produced wheat is estimated to fall 9% below the five-year average to 5.7 Mt, while H&I usage for total wheat (inc. imported) only 2% lower than the five-year average.

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