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Wheat Market Update - 5th September
The EU wheat crop has been marked down to 83.5 million tonnes, from 94.5 last year, putting upward pressure on the market.
French, UK and German crops are all smaller than last year - France down to 29.9 million tonnes (37.4 last year), UK down to 14.2 million tonnes (16.05 last year), and Germany down to 19.2 million tonnes (20.7 last year).
LIFFE wheat futures rose by £8.50 per tonne, basis November, during month of August.
Smaller EU and dramatically reduced Black Sea wheat crops have led to rallies in the world market.
Wheat Market Update - 13th August 2003
Wheat Prices Continue to Increase
Reports are coming in that the UK, French and German harvests will be even lower than previous smaller crop predications. The French and UK crops may be as much as 20% and 12% less respectively.
Earlier this week the USDA updated its supply and demand estimate for 2003/4 world stocks. World wheat production was lowered further to 549 million tonnes and stocks at the end of the season will be considerably down.
The falling pound sterling against the euro has had a major effect on wheat prices helping to drive prices higher in this bull market.
Having seen the dramatic rise in the price of both physical and futures wheat prices in July events in the past two weeks have increased LIFFE (London International Financial Futures & Options Exchange) by a further £5.00/tonne. November delivery prices have risen by a further £5.00/tonne for bread wheat, £6.00/tonne for biscuit wheat since the beginning of this month.
News Bulletin - 12th August 2003
ADM Milling Ltd has announced a flour price increase of £35.00 per tonne for bread making and soft flours, effective from the 1st September 2003.
This increase is primarily due to wheat supply being subject to rising prices for many months now. The reduced size of the European crop, including the UK's, the export demand for home grown wheat into drought stricken southern Europe and the demise of the Russian and Ukrainian exports have all combined to drive up wheat prices. Further a field the Canadian Wheat Board has reduced its volume forecast for this year due to continuing drought in the west although the crop size is significantly greater than last years record low. In the US wheat prices are rising on strong export demand.
The northern Europe harvest is now well underway with early reports of UK bread making wheat being of improved quality.
Wheat Market Update - 7th August 2003
European wheat prices edged higher again last week as concerns over the supply situation continued to grow.
Reduced crop sizes in Germany and France are increasing demand for UK wheat for export to the southern EU countries.
Wheat Harvest Report - August 2003 - Outlook
Executive Brief
- UK wheat prices UP due to weaker sterling.
- 2003 wheat crop likely to be DOWN by more than 1.3 M tonnes due to lower plantings.
- Group 1 plantings 10% LOWER at 17.1%.
- Gluten prices up by 25% on increased demand.
- Export demand for crop 2003 UK wheat strong to south Europe due to EU TRQ import system and drought in southern Europe.
- Sterling continues very weak against the Euro.
- No serious presence in 03/04 export market for Russian/Ukranian crop.
- EU soft wheat crop seen as low as 85 million tonnes - 10% lower than last year.
- November 02 to November 03 - UK Group 1 prices UP by £24.50 per tonne.
- November 02 to November 03 - UK Soft wheat prices UP by £24.25 per tonne.
Extract from British Baker - 8th August 2003
Managing Director Ian Pinner said: "We've seen further increases in the
price of wheat in the past 8-10 days. The main factor has been the reduced
size of the EU crop and also, more locally, the UK crop. It comes back to
supply and demand with smaller crops and the reluctance of farmers and
merchants to sell but processors and exporters wanting to buy.
"A rise in the price of flour has been expected for some time now, a £35
rise barely covers the increase in cost of raw materials and if our
suppliers predications on the wheat price turn out to be correct then
further flour price increases through the rest of the year are not out of
the question."
Harvest 2003 Plantings
Area estimated to be down by 8% on 2002 at best.
Production 2003
High trend yield would give a crop of 14.7 M t (2002-16.05)
Varieties 2003
Euro/GBP Exchange Rate
UK Prospects 2003
- UK wheat Production down 8% or 1.3 M t from 16.0 M t in 2002 to an estimated 14.7 M t.
- Group 1 sowings down 10% from 19.0 to 17.1%.
- Export market for UK inter-EU is strong due to TRQ import barrier for Russian and Ukrainian wheat. UK surplus will be exported to Spain/Italy.
- Lower UK yields.
EU Harvest 2003
- EU soft wheat crop down to 85 million tonnes, 10% lower than last year.
- Lower yields in Germany and France.
- French plantings down by 4.0% (Strategie Grains est. May 2003)
- German sowings down by 3.0% (Strategie Grains est. May 2003)
- After difficult winter conditions France, Germany and the UK are all suffering from the heatwave and drought as harvest begins.
World Harvest 2003
- US - mid-west drought, presenting problems for a second year in a row.
- Canada - in drought, current soil moistures low.
- Higher energy prices (and the effect on fertiliser prices) are switching wheat & corn planting intentions into oilseeds.
- Australian still in drought - will rain bring planting relief?
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