Grain Stocks Reassessment

The official wheat stock level that underpins the UK supply and demand balance sheet is under review as being too high.  DEFRA, with the support of the HGCA, is looking into the assumptions that were made in the autumn of last year.  Survey data that is used to assess the total crop, sales, exports, domestic consumption and ending stock levels did not completely correlate at the end of the 2013/14 season.  This meant DEFRA had to make assumptions on what had happened to the tonnage.  The bulk of the surplus was assumed to have been carried over into the 2014/15 marketing campaign, meaning the opening stock level was inflated.  It is possible that the wheat opening (and therefore closing) stock level might be readjusted down by as much as 400,000 tonnes when the final balance sheet is published in September. 

It is unlikely to affect the market noticeably because, a) this has already become known and the market has adjusted for it already, b) with such a large surplus anyway, it makes little difference (it is not as if it puts a surplus into a deficit) and c) because DEFRA make it clear in their balance sheet estimates that the figures are considered within a confidence interval of 200,000 tonnes at any time.  It is notable that if one of the lines in the supply and demand balance sheet (such as home fed grain) is incorrect by only 50,000 tonnes, this could compound over 10 year to make a half a million tonne error on the stock level anyway.  This demonstrates why the surveys are important on a regular basis. The maize balance sheet is also being recalculated.