October Arable Update November 3, 2015 12:00 am UK wheat production of over 16 million tonnes, imports of 1.2 million tonnes (as usual), carry-over stocks about a million tonnes more than the previous year, and a domestic requirement forecast of 14.6 million. Do the math. The UK has not exported 4 million tonnes of wheat since 1996. And it is highly unlikely to do anything near that this year either. Not with the strength of the Pound, the very slow start we have had to the UK export campaign, and the surplus in the EU. The USDA has increased its expected EU wheat export figure to 33 million tonnes this year, less than last year’s 35 million; leaving forecast year end stocks 50% higher year-on-year. Exports have been slow so far this season though and other analysts are less optimistic about exports than the USDA. If they are right, that stock level could be even higher. UK wheat futures prices demonstrate aprice increase for every position from now until the furthest position in November 2017. With the high stock levels just discussed, it seems unlikely that this position will last all season. The barley market is also very well supplied. The chart below shows the UK barley trade over 25 years. The UK has not had a surplus to export of this size since 1998. Surely this is going to have an impact on the area planted this year? The forecast export figure in the chart is based on retaining the highest carry over stock over the entire period of the graph at over 1.5 million tonnes. UK BARLEY, IMPORT & EXPORT HISTORY AND FORECAST – Source: AHDB/Andersons The large UK pulse crop also requires a strong export campaign. This is being currently hampered, not only by the strength of Sterling, but also as Egypt (the main bean buyer in the world) is in a spot of financial bother at the moment with cash flow causing problems. Early bean shipments are yet to receive payment and other vessels waiting to set sail are holding tight for credit to flow. It is unclear how long this is likely to last.
