UK. Wheat prices drop back as harvest falters

03.08.2017

Wheat prices have dropped back as the UK harvest ground to a halt following widespread showers.

Harvest had got off to a ‘strong, early start’, and while CRM AgriCommodities director Benjamin Bodart said it was ’too early to reach any conclusions’, first cuts had shown a ‘somewhat better than expected output’.
 
Pressure

“UK wheat futures prices have retreated 6 per cent from the July peak amid harvest pressure and a decline in global markets,” he said.

“The UK wheat has generally coped well with the lack of moisture and it has benefited greatly from the sunshine in June, with good quality reported from the southern counties.

"It looks like although the quality is good, yields have not been diluted, coming off in line with averages if not better than expectations.”

He added harvest was likely to make good progress this week, despite weather models showing risk of downpours moving from West to East.
 
OSR

For oilseed rape (OSR), similar comments were reported with generally good results.

“Yields above four tonnes/hectare are common but a national yield could be closer to 3.8t/ha, versus a five-year average of 3.45t/ha, pushing the UK production above the two million tonnes mark versus 1.8mt last year.

“The recovery in prices since last season could likely lead to an increase in planted area next season, with margins supported by good yields."

In Scotland, harvest also got off to an early start before being curtailed by showers. Winter barley has, in general, been combined in most areas, with yields reported as fairly average, according to Cefetra farm grain buyer Sam Scott.

But he warned there was concern of desiccated OSR this week, with hail and thunderstorms forecast across Scotland.

“Initial OSR yields are also being reported down some 10-14 per cent per acre,” he said.
 
Europe


Across the EU, Strategie Grains has raised its forecast for the EU rapeseed crop by 0.8mt to 21.9mt, with France up 0.52mt.

For wheat, Mr Scott said prices in the UK had ‘recovered slightly’ over the past week, with consumers chasing harvest supplies.

“Strong demand from distilling and ethanol sector and a weaker sterling have further underpinned regional values,” he added.


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