European Wheat Crop Forecast at a Six Year High

Both old and new crop wheat values have significantly declined over the last seven days.

Feed wheat for spot collection is currently valued in the region of £162-165/T ex-farm with very little buyer interest available. End-users remain reluctant to extend their cover into the summer months, presumably because harvest looks set to be an early one this year and there are plenty of European feed wheat and maize corn supplies arriving into the Humber to keep them well covered for the time being.

Old crop feed barley is currently trading in the region of £135-140/T ex-farm for movement between now and harvest. Local farm demand is helping to keep the market in our region buoyant and offers a good opportunity for those of you with feed barley still left in the shed.

As for new crop values, £145/T ex-farm currently looks like a realistic offer for as available collection. Further forward, November movement would offer £150/T ex-farm for many farm-sellers in our region.

The latest supply and demand estimates from the US Department of Agriculture paint a rather divided picture for wheat production next season; Europe on the one hand is forecast a fantastic harvest this year whilst the US on the other hand will suffer a reduction in grain production.

This year’s European wheat crop is forecast at a staggering 145M/T – the third largest crop on record and the highest output for six years. The UK is expected to contribute almost 15.15M/T to this, a 27% increase on last year’s disappointing crop.

For the US, this year’s wheat crop is said to be at its lowest for eight years due to “continued drought and April freeze events” across key growing regions in the Southern plains.

If the above is realised, Europe could well overtake the US and become the world’s largest wheat exporter next season for the first time in over 60 years. According to the estimates, Europe will export 27.5M/T of wheat throughout the course of the upcoming 2014-15 season, emphasising the potential extent of the damage done to the US wheat crop.

Meanwhile, Political unrest over in the Ukraine has escalated over the weekend and although the Ukraine has condemned two unofficial referendums organised  by pro-Russia groups in the east of the country as a “complete farce with absolutely no legal basis”, the move undeniably indicates further outbreaks of violence.

Judging by the recent decline in the market however the potential of this year’s European crop looks as though it outweighs the potential of a market absence by the