|↑ WHEAT – The UK faces a reduced harvest, but imports should suppress further price rises.|
|↑ SOYA – Short-term concerns about dry weather on the US harvest and South American plantings.|
|↑ SOYA – Strong US exports to China|
|↓WHEAT – Ample wheat supplies anticipated globally for 2020-21|
|↓SOYA – Longer-term, we expect a global surplus for 2020-21.|
Despite forecasts of a UK wheat harvest down by up to 40%, feed wheat prices have mainly remained steady as we move into September.
Ration prices are already at the upper end of their range over the past four years.
The better news is that, whether the UK wheat forecast proves to be just scaremongering or not, the fundamentals internationally should keep a brake on further UK price rises.
The AHDB still anticipates large global stocks and imports may cap any advance in UK prices.
“One of the future drivers for global wheat prices will be Canada, who are anticipating a wheat harvest of 35.7Mt, which would be their largest wheat crop for seven years.”
Imports step in
Also, more UK wheat has been brought in with the better weather at the close of August, and damage will have hit milling wheat the hardest. Domestic feed wheat supplies will be, at least, partly supplemented.
With much of the UK harvest delayed and farmers currently slow to release stocks, imports have already stepped in.
“There are feed wheat boats from Europe beginning to be discharged in the north of the UK this week, which shows that there is the tonnage out there to fulfil demand,” Humphrey Feeds said in its latest update.
“(It) also shows that the level of UK prices is so high that it is cheaper to import wheat.”
Soyameal has climbed a little during the past month but is still below the level of a few months ago.
The latest forecast from the International Grains Council has been lifted 8mt since July, but consumption estimates are also higher.
In any case, a small global surplus is still expected in 2020/21, according to the AHDB, but short-term worries are currently supporting prices.
Dry weather is casting a cloud over the soya plantings in South America, while traders are awaiting more definite news about the state of the current US harvest.
US soya exports to China have been going ahead apace following the ‘Phase 1’ trade deal, which is also keeping prices firm.