What does UK cereals supply and demand look like this season? Grain market daily

• UK feed wheat futures (May-25) closed at £186.50/t yesterday, falling £2.80/t from Wednesday’s close. The Nov-25 contract lost £1.75/t over the same period, to close at £186.80/t.
• Despite the European Union trimming usable production of soft wheat to a 12-year low (112.3 Mt), European wheat markets were pressured as Egypt reportedly made no purchases following its wheat tender yesterday. Also, Black Sea grain continues to price competitively, Russian wheat (12.5% protein) for December 2024 delivery (FOB) was quoted around $225-227/t (approx. £178-179/t) (Reuters).
• Paris rapeseed futures (May-25) closed at €495.25/t yesterday, rising €5.50/t from Wednesday’s close. The Aug-25 contract rose €6.00/t over the same period, to close at €461.25/t.
• A strengthening in palm oil markets following bargain buying supported both European and Canadian rapeseed markets. Palm oil supplies are still reported to be tight.
• US markets were closed yesterday due to Thanksgiving.

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Earlier today, AHDB published the first official UK supply and demand estimates for wheat, barley, oats and maize for the 2024/25 season. Following a difficult growing year, it’s perhaps not surprising that the impact of a poor harvest shows some abnormalities from an average balance sheet. So, what are the key changes?

Heavier reliance on imported grain

Current production estimates for harvest 24 suggest that total cereals production in the UK fell 11% year-on-year. This is driven by a 21% decline in the wheat crop, though we did see larger barley and oat crops.

Heavier wheat and maize opening stocks were not enough to offset this overall drop in cereals production, and as a result, this year the UK will rely on a greater volume of imported grain than last season and the previous five-year average. Full-season wheat imports are estimated to reach 2.75 Mt, up 13% on the year. While maize imports in 2024/25 are forecast down slightly on the year, with greater opening stocks, the volume of imported maize used for domestic consumption is due to rise on year earlier levels too. 

A pullback in domestic consumption

In 2024/25, total domestic consumption of cereals is pegged at 24.18 Mt, down 2% on the year, but relatively in line with the five-year average.

Much of this decline comes from a downturn in demand for grain being used for animal feed production. We are anticipating a second year of recovery in feed production by compounders and integrated poultry units (IPUs). However, due to reduced availability of domestic grain, and competitively priced maize imports, the decline in the amount fed on farm is expected to outweigh that increase.

Demand from the human and industrial sectors is also forecast to fall year-on-year. This decline is driven largely by a fall in demand from the bioethanol industry, with neither UK plant expected to run at full capacity as margins come under pressure.

How tight is the total UK cereals balance sheet?

Overall, the drop in supply of total cereals for harvest 2024 outweighs the decline in domestic consumption. As such, we can expect a tighter balance of UK cereals throughout the 2024/25 season at 5.39 Mt, down 14% on the year. When taking into account an operating stock requirement, the amount therefore available for either export or free stock is estimated well below the five-year average, at 3.04 Mt.

For more in depth information on each major UK grain, click here.

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