Monday Market Briefing - 21st October 2024

Last week the AHDB released its provisional UK crop production estimate, pegging the crop at 11.1mmt, down 2.9 mmt from last harvest 2023. This figure is in line with expectations and a tad higher than the USDA’s last estimate and definitely not a reason to throw away the grain store key.

So we know the problem, now for solutions which are the record crop 23 carry out (2.8mmt) and imports. 

UK imports have grabbed the headlines, with farm grain retention easily compensated by imports of wheat and corn. The more that comes in effectively expands the UK wheat harvest.

 Maize imports for July and August have reached 515kmt, 28% up on last year and 37% more than the 5-year average. Wheat, to the end of August, has hit 608kmt, a figure that took until October to reach last year.  If this pace is maintained, wheat imports could reach 3.4mmt plus, a cool 1mmt more than last year. Although if that happened it would leave an untenable amount of domestically produced wheat on the shelf, our crop desperately needs to be released and absorbed into the demand dynamic otherwise May 25 futures are very exposed.

The elephant in the room, however, that could seriously upset this market scenario is planting delays in the UK. If the 2025 crop is much smaller we will need the crop 23 and crop 24 carryout for next year.  However, it feels like plantings have progressed better than last year and recent price pressure on Nov25 wheat futures suggests some people think we are in for a crop.

 Global markets remain quiet, we have yet to see what an ever-increasing US corn crop will do to our markets and French farmers are also struggling with their maize harvest and wheat plantings due to a very wet autumn.  French wheat plantings have reached 10% complete. Last year at this point they were 32% complete and the 5-year average is 27%, clearly the French aren’t usually early planters.

 Fingers crossed the forecast is right and the land starts to dry out, nobody wants a smaller crop with no confidence to trade it.

Have a good week.