Weather

After an unsettled weather pattern to the first two weeks of September this past week has allowed harvest and winter crop planting to progress well. Temperatures have dropped but there have been some good drying sunny days. Daylight hours have reduced quickly and does not seem long since it was mid-summer as autumn approaches but at least this year there has been a window to allow winter crop planting to get done and to allow potato lifting to progress as well.

Wheat

The liffee feed wheat futures have recovered to where they were four weeks previously and November 2024 futures are up £5 from two weeks ago to £186.50/t and May 2025 again are up £5 to £198.50/t over the same period.

There are several factors supporting increased prices and the lack of rain and low soil moisture in Russia for drilling their 2025 winter crops which also includes Eastern Ukraine, and Kazakhstan is resulting in their winter drilling to be at its slowest pace since 2013. Just 2% of Ukraine winter wheat area has been planted due to record high temperatures and drought.

A Russian missile strike against a ship carrying Ukrainian wheat helped to support wheat prices as it caused uncertainty regarding security of further supplies and further export potential.

Low soil moisture could also become an issue on the US Plains where winter wheat planting is underway, and the winter wheat area affected by drought amounts to 52% and continues to increase.

Australia, in contrast, has been having good weather which has led to a forecast of the fifth largest winter crop production on record. Wheat production is now estimated at 31.4mt, which would be 23% up on the year and 7% above the five-year average. Exports have been estimated at 21.8mt which would be up 10% on last year. The increased Australian tonnage could help to make up some of the global wheat stocks which the USDA are forecasting down 8% from last year and 12% below the five-year average.

The EU wheat crop tonnage has been revised downwards to 114.4mt following the very wet weather in France and Germany and the crop is now the smallest in 12 years.

The USDA has now forecast the global end of season 2024-25 stocks at 257.2mt. Higher Canadian stocks plus larger crops in Australia and Ukraine more than offset the 4mt drop in EU wheat production.

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Wheat exports

Russia is looking at an exportable wheat tonnage amounting to 44mt from a production this year of 82.2mt which is less than originally forecast due to weather issues. Russia is thought to have exported 3.6mt in July, 5.7mt in August, and if they export 14mt in September this will leave 30mt for the remaining nine months of the season.

The Ukraine is looking to export 13.8mt from its wheat production of 21.8mt. The EU have only exported 4.8mt so far compared to 6.2mt last year at this time which is due to EU prices higher than Russian prices making it difficult to find sales.

France is the EU’s primary wheat exporter and exports outside the EU are down by 60% on the year with only 4.1mt compared to an average of 10mt shipped and it is estimated that it is the smallest French wheat crop for 41 years at 25.15mt. Nigeria have been the highest importer of EU wheat with imports of 654,000t followed by Egypt, Morocco, Algeria and then 322,000t to the UK which goes some way to replacing the small UK wheat crop, which is over 3mt down on last year.

US exports so far this season total 5.736mt which is 32% ahead of last year and they are looking at exporting over 3mt more this season.

UK wheat usage

The UK flour milling industry, including starch and bioethanol production, used 482,100t or 9% less wheat in July 2024 than in July 2023. Usage of home-grown wheat fell 12% compared with July 2023 while there was a 9% rise in the amount of imported wheat used year-on-year.

As mentioned earlier the UK is the fifth largest export destination for EU common wheat so far this season. From July to September the EU exported 277,700t of wheat to the UK, up from just 93,200t in the same period last season which was due to less wheat being used to produce starch and bioethanol. At the end of last season maize was used instead of wheat due to its price competitiveness against wheat.

For UK human and industrial cereal usage total wheat milled is down from last year by 8.7% at 482,100t. Home grown wheat usage was down 12.1% from July last year at 386,200t while imported wheat was up 8.5% to 95,900t.

Maize and Soybeans

13% of the US maize area is now under drought conditions as is south-eastern Europe. Matto Grosso accounts for 33% of maize produced in Brazil, and the success of the second maize crop also known as Safrinha, which is normally planted in February is the largest maize crop in Brazil and is dependent on the ongoing dry hot weather which could affect soyabean planting which starts this month.

Brazil is facing one of the worst droughts on record with more than one-third of the country affected and includes the Mato Grosso which produces about 29% of the county’s soybeans.

If the soyabean planting season is delayed this could push back the planting of Safrinha maize and potentially affect its yield. Brazil also has the concern of the approaching La Nina weather event which typically brings drier weather as well and drought in south-eastern Europe is forecast to reduce the 2024-25 maize crop down to 60.3mt.

Soya meal prices have been trading lower since the beginning of the year following ample supply from Brazil and expectations of a record US soyabean crop. Brazilian soyameal, 48% protein, ex store Liverpool was quoted at £356/t for September delivery last week. Brazil’s export of soybeans in August was 4.1% less than last year at 8.04mt due mainly to adverse weather conditions.

Oilseeds

European rapeseed prices have been supported by EU rapeseed tonnage being reduced which also applies to sunflower seed production as well. EU rapeseed is forecast at 16.9mt which is 340,000t down from the July estimated tonnage and would be down 15% on last year.

Dry weather in Brazil as previously highlighted is supporting prices with concerns for planting their crop and recent lower prices has been the main reason for lower rapeseed planting in the EU. Rapeseed delivered Erith for November was quoted last week at £403.50, up £3.00 on the week.

Australia has also reduced its canola (oilseed rape) planted area to 3.2m ha due to increased cereals plantings which has resulted in an 8% fall in production on the year and is 3% less than the five-year average.

Lower production on the year has partly led to the 24% year-on-year drop in exports to 4.1mt. China has announced a one-year anti-dumping investigation into imports of Canadian Canola. This follows Canada’s decision to impose tariffs on Chinese electric vehicles and other products and if implemented could see Australian rapeseed exports to China in place of Canada.

Barley

Demand for feed barley continues at a £16-£18 discount to feed wheat. Most potential malting samples are meeting the required specification putting the malting premium at around £25/t above the feed barley average price. This has resulted in any non-contracted malting barley remaining on farm hoping for a bigger premium in future.

The UK is unable to compete on the export market due to ample Black Sea origin supplies and prices are unlikely to drop unless Russian stocks for export fall further. Ex-farm barley prices are lower than in the early months of last season and in the corn returns for the week ending August 29 premium malting barley for spot delivery averaged £176.60/t which is much lower than £222.20/t, which was the average for the last week of August 2023.

This was just £26.30/t more than the spot average feed price. A year ago, the gap between spot ex-farm premium malting and feed barley was over £60/t. This is due to lower nitrogen levels averaging 1.5% and good quality samples which is the same in Europe which means that more barley needs to find a home in the UK resulting in lower malting premium being paid.

There is also a provisional 6% larger barley area in England which means with the Scottish barley area as well there is going to be more premium malting and feed barley looking for a home.