UK Wheat Imports Begin to Slow – Finally!

UK feed wheat values have continued to decline over the last seven days as local ex-farm values play catch up with the on-screen declines from the week previous.

Feed wheat for spot collection last week fell below the £155/T ex-farm position and is currently trading at £150/T ex-farm. Movement further forward into the summer months offers little carry and end-user demand has become particularly thin – hardly surprising given how quickly wheat prices appear to be retreating at the minute. 

Full specification group 1 would make £180/T ex-farm for February/March collection whilst movement into June/July would offer £5/T more.

According to the latest import / export figures for the month of November 2013, care of HMR&C, quality wheat imports significantly declined with total wheat imports declining to 129,000/T; the lowest level in 16 months.

Furthermore, the HGCA now estimate that almost 80% of the wheat currently being milled for flour production is UK grown, a sharp increase from this time last year and finally in line with what we would normally expect given the quality of the 2013 harvest.

Consequently, the remaining six months of the 2013-14 trading season should bring good end-user demand for milling wheat’s (particularly for full specification group 1 varieties); but due to the lack of pre-Christmas interest there appears to be a plentiful amount of full specification varieties available on farm for them to take their pick from.

Securing movement further forward at a £25/T+ premium could become good value.

Elsewhere, feed barley is continuing to trade at £130/T ex-farm for March/April collection. The latest HMR&C figures have implied this season’s barley export program is well underway with 635,000/T of barley exported between July and November 2013 – more than double the amount exported the year previous.

Maintaining this sort of level could however prove difficult now that the competitively priced Southern Hemisphere crops are beginning to flood the market place.

Meanwhile, OSR values have significantly declined this week with current ex-farm values for spot collection trading around the £380/T mark as the pound continues to strengthen in the buyers favour. Plentiful Canadian and Australian supplies appear to be fulfilling Chinese demand at the minute although we beginning to see signs of logistical problems which could potentially bring an increased demand specifically for European supplies… Although I would treat the term ‘potentially’ with caution here.

UK import / export data, HMR&C (via HGCA) –

http://www.hgca.com/markets/market-news/2014/january/14/hmr-and-c-uk-cereals-trade-data-for-november-2013/