Wheat stocks held by UK farms and merchants rose as of the end of June, but not by nearly as much as some traders have indicated, in comments suggesting a surplus of some 1m tonnes.
Farms in England and Wales, responsible for the great bulk of UK wheat output, held 494,000 tonnes of wheat in store as of the end of June, a rise of 91,000 tonnes, farm ministry Defra said.
Ports, merchants and co-operatives held a further 562,000 tonnes of home-grown supplies, nearly identical to last year, with a further 258,000 tonnes of imported wheat on top, more than double that a year before.
The total figure from these sources, at 1.31m tonnes, was 22% higher than at the end of June last year.
'Kept back for feed'
The extra wheat on farm, despite a 13% drop in production last year, reflects the poor quality of the crop, Defra said.
"The quality of the wheat was poor. As a result there has been an increased demand for imported wheat stocks," the ministry said.
"It is thought that the wheat still on farms is being kept back for animal feed due to the low quality."
The 2012 crop recorded the lowest bushel weight, one key quality measure, on records going back to 1977.
'Almost unprecedented stocks'
Nonetheless, while wheat will also being held elsewhere in the chain, such as mills, the amounts revealed in the Defra survey appear well short of amounts that have been talked of in the trade.
One trading house reported earler this month that the UK "starts off the new season with almost unprecedented stocks of wheat.
"Close to 1m tonnes of surplus wheat, over and above what is normally required to keep consumers supplied, has been carried over into the new season."
Inventory levels are an important level in pricing, with higher stocks implying that buyers need to compete less for supplies.
For the UK, inventory levels are particularly important as the country, if it had large carryover stocks from 2012-13, may be able to return to being a net exporter this season – although this will depend on whether the country's two large ethanol plants are functioning at full rate too.
The UK began 2012-13 with inventories of 1.50m tonnes of wheat, according to Defra, with the average for the previous five seasons pegged at 1.98m tonnes.