UK Cereals Market Update and Global Impacts

Harvest is ongoing with very mixed results; early reports are highlighting slightly lower yields than average for winter wheat (-5% to -8%) and quality also very mixed with bushel weight and protein level concerns. Whilst milling wheat markets locally are limited, information on protein content will likely reflect protein trends in feed wheat varieties. UK Flour Millers Group 1 samples have generally averaged 11.5 to 12% crude protein (on a dry matter basis), below the required 13%. This is perhaps not surprising given the dull conditions experienced this year. It would be prudent therefore to check the protein content of feed wheat inclusions in livestock diet formulations.

The average reported yield (as per the AHDB’s second 2024 harvest report) for the UK for winter barley is 6.3t/ha – 11% down on the UK five-year average. Winter malting barley quality is good, although there have been some lower bushel weights and subsequently lower screenings, and specific weights are averaging 64kg/hl across the UK. Nitrogen levels within the winter malting barley samples have averaged 1.5%, which is low as maltsters are looking for samples of up to 1.75%. This could affect exports as a higher nitrogen level up to 1.85% is required for continental malting. While both winter and spring crops so far are reported to be useable within the UK, this could prove a challenge for exporting. With higher nitrogen levels required for continental malting, the lower levels in the 2024 crop could mean more barley needs to find a home in the UK. This is likely contributing to ex-farm malting barley premiums over feed barley being notably lower than this time last year, equating to just £26.30/t more than the spot UK average feed barley price at the end of August. A year ago, the gap between spot ex-farm premium malting and feed barley was over £60/t.

Barley markets have been very quiet this week (w/c 2^nd September), with farm sales slowing down following the harvest movement period. This has further reduced feed barley’s discount to wheat to between £15 to 20/t (region dependent). At the moment the UK is unable to compete on the export market due to ample Black Sea origin supplies. This could change if we see further price decreases in UK feed barley due to supply from malting varieties.

There has been little change in the feed bean market this week. Harvest has continued to progress further south with some impressive yields being reported, however the majority range between 4 to 5t/ha. Values continue to hold a £40/t premium to London wheat futures.  Demand  remains  limited  as beans continue to be viewed as expensive in the mid-range protein market.

Wheat markets have seen a buoyant start to September although still down 20% from the May highs. With the US and EU harvests nearing completion and harvest farm selling pressure here drying up, trade liquidity has become an issue at the lower price levels, firming the markets. Whilst very volatile crude oil prices and currency rates are acting negatively on our domestic markets at the moment, any short-term lift to prices may well come from current weather risks leading to new crop production downgrades in the Black Sea regions and South America. Currently the AHDB’s six-month outlook for wheat, maize and barley prices is neutral-bearish.

 

£ per tonne	Ex-farm Sept ‘24	Nov	March	Nov
		‘24	‘25	‘25
Wheat	190	195	200	194
Feed barley	170	175	180
Malt. dist. barley	225	230
Oilseed rape	382	384	388	380
Feed beans		235

Source: AHDB and United Oilseeds

Mark Bowsher-Gibbs, SAC Consulting, mark.bowsher-gibbs@sac.co.uk; 0131 603 7533