What’s happening in UK ex-farm feed wheat prices? Grain market daily

Tuesday, 30 January 2024

Market commentary

  • UK feed wheat futures (May-24) fell £2.25/t yesterday, to close at £177.15/t. New crop (Nov-24) futures fell just £0.90/t over the same period, to close at £194.50/t.
  • Domestic markets fell following pressure on both Chicago and Paris wheat futures yesterday. Paris futures fell as ample global supplies, a lack of new demand and uncertain export prospects weighed. China has approved Argentine wheat as a supply origin, bringing export competition into focus.
  • Paris rapeseed futures (May-24) fell €6.00/t yesterday, to close at €426.00/t, following pressure on Chicago soyabeans and the wider oil market.
  • Chicago soyabean futures felt significant pressure yesterday, with concerns about Chinese demand considering the real estate crisis and improving expectations for South American supply.
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Megan Hesketh

Senior Economist - Agribusiness

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What’s happening in UK ex-farm feed wheat prices?

Yesterday, the latest ex-farm Corn Returns data was released, showing trades in the week ending 25 January 2024. As such, it is a good time to review how our physical markets are moving compared to UK feed wheat futures.

Over the past few weeks, overall old-crop global wheat markets have continued to feel bearish sentiment from competitive Black Sea supplies in one way or another. This is against a backdrop of forecast ample global maize supplies and with a key influence of currency movements too.

This pressure has filtered through into week-on-week movements on UK feed wheat futures as expected and we have seen downward movement in physical markets (circled). The UK average spot ex-farm price for feed wheat was below £180.00/t in the week ending 25 January, the first time since September.

In addition to this global trend, there is an increasing focus on the prospect of higher domestic wheat end of season stocks for 2023/24. Stocks are predicted to rise despite a tighter availability this season, as farmers hold grain on-farm amid lacklustre domestic demand and export potential.

Interestingly, ex-farm prices have declined less than UK feed wheat futures in recent weeks as shown in the graph. We can see regional differences too, with steeper falls in South West prices than North East since the start of the year. Check basis with your local merchant(s) to understand what these changes in the futures prices mean for you.

Figure showing UK ex-farm prices to futures movements for UK wheat

Meanwhile, the discount of spot UK feed barley to UK feed wheat has stabilised around £23-24 /t over recent weeks. Maintaining this discount could look to keep barley featuring into animal feed rations at the expense of wheat.

Figure showing UK ex-farm feed wheat to feed barley prices

Going forward, the prospect of tighter global and domestic wheat supplies could provide some support to markets short term, and wheat in relation to global maize prices. Though continued competitiveness of Black Sea supplies on the global market remains a key bearish factor overall, influencing physical markets. With larger domestic end season wheat stocks forecast, could some regions look to price to export? For new-crop, a growing premium of Nov-24 prices to May-24 contract shows the UK positioning for a tighter domestic wheat supply, influencing how we domestically price to the continent. Look out for our next release of the Early Bird Survey in the coming months, when weather allows, for more insight on the size of the harvest 2024 crop.

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