The extent of the squeeze on UK quality grain supplies from
last year's dismal harvest has, unusually, forced millers to turn to the US for
purchases of soft wheat, Agrimoney.com has learned.
UK buyers have, after buying two container loads to test
that US supplies are a suitable replacement for lost domestic supplies, purchased
"a boat load", believed to be of 25,000 tonnes, of soft red winter wheat for
March delivery, traders said.
While the UK typically imports large amounts of hard wheat a
year, largely from Canada, to blend with domestic supplies and improve flour
quality, the purchase of US soft wheat is believed to be the first in at least
One large European commodities house, saying that "at least
one UK miller has now bought some soft red winter wheat from the US", said that
its traders believed that the last time such imports were made "was well in
excess of 20 years ago".
US importance too
The trade, while relatively small in US terms, comes at a
sensitive time for its wheat markets too, amid talk that the non-traditional
buyers forecast to turn to America as supplies from other exporters dry up.
Talk of US exports to Brazil and Russia helped support wheat
prices on Wednesday even as values of other grains fell in Chicago, where soft
red winter wheat is traded, although that resilience wore off in early deals on
More on US wheat shipments will be revealed later on Thursday,
when the US Department of Agriculture unveils weekly export sales data.
The UK is typically an exporter of soft wheat, used in
making biscuits and cakes, with the relevant Group 3 varieties accounting for
more than 20% of domestic wheat sowings.
However, last year's rain-damaged harvest meant that the proportion
of Group 3 varieties meeting minimum quality specifications tumbled to 14%,
from 49% in 2011, according to the HGCA crop bureau.
Market rumour suggests that the wheat is being imported to
Tilbury docks, close to London, in a deal arrange by Frontier, the joint grain trading
venture between Cargill and Associated British Foods, although the group
declined to comment on the speculation.
"We do not comment on our business and we are not going to
start now," a trader on Frontier's wheat desk told Agrimoney.com.
The market talk also says that there is some of the load
left to purchase, although most of has been taken by two leading milling