The UK wheat harvest rebounded more than had been expected
this year, official data showed, easing ideas of a squeeze on supplies which
spurred calculations of the UK remaining a net importer of the grain.
The UK, the European Union's third-ranked wheat grower, raised
wheat production by 5.4% this year to 15.16m tonnes, farm ministry Defra said.
The estimate, drawn from a farmer survey, came in above market
expectations broadly centred on a range of 14.5m-15.0m tonnes, according to Agrimoney.com
Industry group Coceral pegged the crop at 14.75m tonnes,
while the International Grains Council has estimated the harvest at 13.9m
The Defra figure implies a bigger rise in yield than had
been expected, given that UK wheat sowings for the latest harvest are believed down
by some 3%.
Harvest reports from the AHDB had estimated the British wheat
harvest, which comprises the vast majority of UK output overall, at 7.9-8.1 tonnes
per hectare - in line with a five-year average of 7.9 tonnes per hectare, which
was also the 2016 result.
Indeed, the Defra harvest estimate points "to above-average
UK yields", said AHDB senior analyst Helen Plant.
Ms Plant added that the bigger-than-expected harvest
production could also "help reduce the impact" on UK wheat supplies of lower
carry-in stocks, which officials have estimated at 1.77m tonnes as of the start
of 2017-18, a three-year low, and below an average of some 2.1m tonnes.
Indeed, with UK domestic demand for wheat being boosted by
use by ethanol plants, many commentators have forecast the UK, one a sizeable
wheat exporter, again being a net importer of the grain in 2017-18.
However, the impact on prices was limited, with London wheat
futures for November easing by 0.5% to £143.00 a tonne – albeit a decline which
took the contract back below its 100-day moving average, and came despite a 0.8%
drop in the pound against the dollar, so boosting the competitiveness of
'Farmers are not
A UK-based trader told Agrimoney.com that the reaction to the
data had been muted by the fact that the country was "not competing for exports
anyway" at the moment.
"Farmers are not selling," he said, adding that "the market
still feels tight - it feels tighter than you would expect with a 15.2m-tonne
A bigger impact may be felt later on in the season, if market
power turns, undermined perhaps by demand for imported corn, which is being
incentivised by current price differentials.
Paris maize futures are priced at their biggest discount to London
wheat futures since December 2015, the AHDB said earlier this week.
"It is in the last two quarters of the marketing year when
we may feel the extra supplies," depending on the extent of exports that the UK
needs to capture.