- Despite forecasts of a bumper Russian wheat crop and increased grain exports out of Ukraine, concerns around US and EU maize crops have been supporting wheat prices. The EU’s average yield of maize has been revised down to an estimated 6.64t/ha, down from 7.25t/ha by MARS, the EU’s crop monitoring service. It is estimated that the EU maize crop will be the lowest in 15 years. In Germany, their Agricultural Ministry forecasts maize production to be 21.5% back on last year at just 3.5mT.
- The Ukrainian Agrarian Council has reported that the sowing area for the wheat 2023 harvest will likely be 30-40% lower, with an output of less than 15mT. In comparison, 19mT has been harvested in 2022, compared to 32.2mT in 2021. The country’s overall grain harvest this year could be around 50mT, back from 86mT in 2021 due to the war. Total grain exports for August out of Ukraine are down 59% on last year at 2.26mT.
UK and Scottish News
- Apart for some pockets of spring barley and beans to cut, harvest 2022 is all but complete and probably the earliest for 25 years. Yields across the board will not break records but are reported to be above the average; wheat 8.2-8.6t/ha, winter barley 7.2-7.4t/ha, spring barley and oats both 5.5-5.9t/ha and rapeseed 3.2-3.6t/ha. Protein levels in wheats are lower mainly due to inefficient nitrogen uptake over the dry summer and possibly reduced nitrogen application.
- Pricing wheat into rations will be affected by the increasing demand for wheat from the distillers, rising 23% in the year to June 2022. In addition, maize yields have fared poorly especially in drought torn France, so demand for local Scottish wheat is at a premium to the rest of the country.
- UK malting barley demand also rose 9% in the first half of 2022. However, a 0.75 million tonne surplus has been reported this year, meaning that malting premiums may disappear post-Christmas, forcing more into feed homes at discounted prices. The demand for malting barley is dropping, with few domestic buyers and little export interest. Consequently, the malting barley price has now fallen to around export levels and the price drop is also due to high pass rates of UK spring barley for malting. As of the beginning of September, the premium over feed barley was about £35/t in the southeast of England and £20-£27/t on the south coast but it is likely that premiums will get less as the cost-of-living crisis continues to worsen.
- Ex farm prices for cereals as of 9th September are as follows:
|Ex Farm||Feed Wheat||Feed Barley||Oats||Beans|
Sources: SAC Consulting, AHDB and Graindex.
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