Agribusiness News October 2024 – Cereals & Oilseeds

Global grains trade eastward

It is now apparent that the EU/Black Sea harvest is down year on year by 20.5Mt (UK-3MT, EU-9MT, Russia/Ukraine-10MT). By contrast, N. American and Canadian production is up year on year by 16.5MT and they have been competing to export eastward.

After modest gains through the first part of September, the wheat Nov Futures price remains fragile. Competing factors of disappointing EU and UK yields, competition from large harvest volumes of Black Sea crop, the strengthening of Sterling in the foreign exchange markets particularly against the dollar, and high US wheat and maize production are all having an impact; compounded by speculative trading. The UK will ultimately be a net exporter of feed barley this year and a net importer of wheat.

The EU harvest was indeed over-estimated; the EU rapeseed production was well below par, and the French wheat crop could be the lowest since 1984, at only 25Mt with an average yield below 6t/ha. Additionally, the German crop will likely be 18.03 Mt, 15% down on last year due to untimely rain leaving disappointing yields and quality.  Additionally, there wasn’t such a rise in spring barley planting as farmers could switch into soya or maize.

UK Harvest and Grain Quality Update

Latest government stats for UK harvest 2024 indicated an 11% reduction in winter wheat area (the smallest since 2020) and a 17% decrease in winter barley area across England, with a corresponding 23% increase in spring barley planting. The oats area increased by 11%. In Scotland, the trend was deemed similar but less marked: wheat down by 8%, winter barley down by 4%, spring barley up by 4% and oats up by 16%.

Winter Barley

In southern parts of the UK, winter barley harvest results mirrored that of France, with low sunlight during key flowering periods leading to disappointing yields in many areas. A similar situation unfolded in Scotland and northern England, with significantly lower nitrogen levels than in 2023 and, in some cases, the lowest on record. AHDB reports winter barley yields, on average down 11 per cent on the 5-year average across the UK. Specific weights ranged from 59 to 72 kg/hl, with an average of 64 kg/hl. Screening retentions averaged 88%.

Winter Oats

Progress in Scotland has been slow, lagging behind recent years’ pace. Oat yields have varied across the UK and between winter and spring oats. On average, yields are down 7%, at 5.07t/ha, though these figures are not adjusted for variety. Winter oat quality has been good, and most samples meet milling specifications. Preliminary results for spring oats are also generally positive, with bold, well-coloured samples and an average specific weight of 53 kg/hl.

Winter Wheat

Wheat harvesting in Scotland has been delayed due to rain and haar.  By the 11th of September, only 16% of the Scottish wheat crop had been harvested although by the 26^th, the majority had been cut. UK wheat yields currently remain 8% below the five-year average at 7.42t/ha. UK output could therefore be below 11MT this year and will have to value the crop high enough to attract the import tonnage required to cover the shortfall.

Spring Barley

By mid-September, 50% of Scotland’s spring barley harvest was complete. Quality has been similar to southern UK crops, with low nitrogen levels averaging below 1.60. Nitrogen (N) content across the UK crop has averaged 1.45%, with most samples between 1.2% and 1.6%. While high N samples are rare, this could pose challenges for exports with a minimum nitrogen specification.  UK spring barley yields are estimated to be 4% below the five-year average, currently at 5.67t/ha. However, it’s still too early to gauge Scotland’s yield average. What is evident however is that the premium for malting barley is fast diminishing for uncontracted sales

Oilseed Rape

Average yields of OSR across the UK are estimated at 2.93t/ha, down 9% on 2023’s performance. Of all the EU27 (plus the UK) Member States, the UK has been the single worst performing country in terms of average yields; average OSR yields in the UK have dropped 10%, (0.36t/ha) during the most recent 5-year period when compared to the previous 5-year period.

Mark Bowsher-Gibbs, mark.bowsher-gibbs@sac.co.uk 07385 399 513