MMN July 2024 – Straights Update
15 July 2024UK Cereals Market Update and Global Impacts
There have been modest gains in spot prices for Scottish grain and oilseeds compared to this time 12 months ago: wheat up £10/t, feed barley up £15/t and rapeseed up £38/t (an 11% gain). Malting barley harvest values remain very similar to this time last year at circa £225/t.
In the global arena, both world grain production and consumption are set to rise for the 3rd consecutive year. For the period June ’24 to June ‘25 production is projected up +12Mt and demand +16Mt. Stocks to use ratio tightens as stocks see a net fall of -9Mt.
2024 looks to be another year for the UK as a large net importer of wheat (circa 1.7Mt). Despite high opening stocks and domestic use easing, the UK wheat harvest is only expected to total in the region of 11.23Mt this summer, down from the 13.98Mt harvested last year. Scotland’s wheat harvest is predicted currently to be down -152Kt (-15%) on last year’s outturn and factors in the reduced area in the ground, down -8% on 2023.
Scotland’s spring barley area is up 4% on 2023 and could potentially take the national crop from 1.57Mt to 1.76Mt, although at this stage it’s difficult to predict accurately. Malting premiums over feed currently look to being closer to the £50/t value rather than the £80/t seen in 2023.
£ per tonne | Basis | Harvest '24 | Nov '24 | March '25 |
---|---|---|---|---|
Wheat | Ex farm Scotland | 185 | 200 | 202 |
Feed Barley | Ex farm Scotland | 160 | 175 | 177 |
Malt. dist. barley | Ex farm Scotland | 225 | 245 | |
Oilseed rape | Delivered Dundee | 382 | 390 | 393 |
Milling oats | Ex farm Scotland | 263 |
Source: AHDB and United Oilseeds
Early estimates show an improving crop gross margin scenario for 2024 harvested crops compared to 2023’s very difficult year, when falling grain prices met with high input costs. Wheat and malting barley margins could potentially lift 20% and 15% respectively this year using standard yield data.
At the start of July, traders have been reacting to concerns regarding the European wheat crop. In France (the blocks biggest wheat exporter), the wheat crop was 60% rated good-excellent, compared to 81% last year. The yield and quality of their winter barley crop that has already been harvested in the southern part of the country has been reported as poor. However, the EU wheat crop estimate has since been raised from 120.2Mt to 121.9Mt as central EU crops are faring better, with potential record yields expected in Romania and Bulgaria.
Currently there are no concerns over global soyabean stocks despite recently flooded areas in the US. The three main soya and maize producing areas – Iowa, Illinois and Nebraska – have seen prolonged and widespread moderate to major river flooding. Meteorologists are predicting dry hot weather in late July/August in these areas, which after the wet spell could impact soyabean pod setting. For the 2024/25 season, global soyabean production is forecasted to increase to 415Mt, with end of season stocks expected to reach 79Mt, up from 68Mt for the 2023/24 season.
mark.bowsher-gibbs@sac.co.uk; 0131 603 7533
lorna.macpherson@sac.co.uk; 07760 990901
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