Grain Market Daily



Alice Bailey, Analyst, AHDB Market Intelligence, 02476 478840



Wheat markets on the increase, will this continue?

UK, Paris and Chicago new crop wheat futures have edged lower week on week (Thursday-Thursday).  Although an upward turn has occurred in the last couple of days for both European wheat markets this has not been as sharp as that seen in Chicago futures.

Chicago new crop futures (Dec-19) hit a contract low on Tuesday at $167.17/t but has recovered somewhat yesterday closing at $171.85/t. The bullish sentiment is unlikely to continue at this pace as the talk from a crop tour in Kansas is suggesting potential for yields well above last year and the five year average. Development is however, deemed relatively late and this could pose a risk if temperatures increase throughout May.

Although a small increase has been seen in the past few days for new crop UK wheat, this is from a more than one year low of £145.10/t, hit on Tuesday.

There are still concerns over dryness in the northern hemisphere but potential for good crops is still present. Expectations of bumper crops in Ukraine and Russia are weighing on European markets. Rain in Ukraine will have assisted soil moistures and crop development. Soil moistures are also relatively good in Russia according to USDA crop explorer data.

Old crop wheat futures for the UK reached a low in mid-march of £157.15/t (May-19) and is currently only a touch above this at £160.0/t as at close yesterday. May futures are currently in their tender period and so losing relevance to old crop farm gate prices.

New Crop Futures

UK cereal usage release

Yesterday the AHDB cereal usage data was released, which includes GB animal feed statistics and maltsters and millers. 

The UK milling industry used 542Kt wheat in the month of March which is a drop of 10.0% year-on-year. The data collected includes flour used for bioethanol and therefore the closure of a UK bioethanol plant since March last year could be a major factor in this drop.

 In contrast UK brewers, maltsters and distillers used 8.8% more barley (173.6Kt) in March 2019 compared to March 2018.

Animal feed production was down for sheep (-19.9%), poultry (-5.5%), cattle and calves (-3.9%) and pigs (-1.2%) from March 2018 to March 2019. The contrast between the weather experienced this March compared to the beast from the east experienced last March is a likely contributor to the major decrease in animal feed production.

The full season to date is, however, more variable (July 2018 – March 2019). Production was up 1.6% for cattle and calves and 1.0% up for poultry. In contrast production was down 4.7% for sheep and 0.6% for pigs.

When excluding integrated poultry, season to date wheat, oats and maize usage was ahead of 2017-18. And wheat and maize usage were also ahead of the five year average. For more information and the full data set please visit our cereal usage data page on the website.


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