Uk grain imports are still proving better value for money

I would like to begin this week’s blog entry by wishing all of our readers a very happy – and hopefully slightly drier – New Year.

After almost two weeks of thin trade, drifting values and little physical offerings, this year’s festive period has certainly been a quiet one for the grain markets. London wheat futures did trade between Christmas and New Year, but it seems to have taken the market until now to get back into some sort of trading routine.

Current prices for spot movement are around the £205/T ex-farm, give or take a few pounds either way depending on farm location and quality specification; around £5-7/T less than the average pre-Christmas bid. Movement further forward into the spring would probably offer a £2-3/T premium.

OSR value shave also suffered in recent weeks and current prices stand around the £350/T ex-farm mark for spot movement. New crop prices are also lower at around £320/T ex-farm for harvest collection. Improved conditions over in Northern Brazil have heightened prospects for this year’s soyabean crop, which could turn out to be a potential record-breaker after all. Drier weather in Argentina hasn’t exactly encouraged prices either. Furthermore, harvesting of this year’s Australian canola crop is almost complete and tonnage estimates are looking a lot closer to 3M/T, rather than the 2.5M/T that was initially expected.

Meanwhile feed barley values have retreated to a much lesser extent, with current values standing at around £195/T ex-farm for spot collection. There are also some good malting opportunities for certain old crop varieties available – please get in touch with the office for more information.

Vast wheat imports have continued, confirmed by the release of Octobers import/export data from the HGCA and while exports stood at a disappointing 90,355/T, imports topped a massive 225,874/T.

This season’s confirmed accumulated total (from July-October) therefore stands at a staggering 811,000/T; more than double the amount we would have normally imported at this point in the season.

Milling wheats have accounted for a significant proportion of the imports, with over 25% (224,000/T) originating from Germany (a key source of high protein milling wheat) – that’s five times the amount we had imported at this point in the season last year.

French soft wheats have also featured with imports for October alone totalling 32,000/T. But are these quality wheat imports pressuring our milling premiums?

The answer to this one (unfortunately for those of you with large un-priced quantities left in the shed), is yes.

French soft wheat is not only marginally cheaper ex the dock than our equivalent wheat ex the farm (around EUR252 ex France, aprox. £205/T); it is far better value for money when you consider the quality of the wheat.

Soft wheat is generally delivered on a ‘minimum of 74kg/hl’ specification and whilst UK softs are generally being tipped around the 71-73kg/hl mark with a claim (barely 10% meet the full 74kg/hl required), the French equivalent is arriving at our docks at a minimum of 80kg/hl.

Poor bushel weights result in poor flour extraction rates; a tonne of wheat at 80kg/hl will give you approximately 780kg of flour, whilst a tonne of wheat at 70kg/hl will produce just 710kg of flour.

And with the relatively high value of wheat itself in the first place, it is not difficult to see why (unfortunately so) a European alternative is looking like an attractive option for our domestic millers.