The improved quality of the UK wheat harvest will prompt a slide in milling wheat imports, but shift pressure to feed markets, where wheat is increasingly part of a "love triangle" with corn and barley, leading analyst Jack Watts said.
UK wheat imports, which unusually exceeded exports 2012-13, and made a strong start to 2013-14 in July, are likely to show further "strong" volumes in August and September, Mr Watts, senior analyst at the HGCA grains bureau, said.
However, this represents a temporary blip, a result of millers buying in advance large quantities of higher grade grain as an "insurance policy" against a repeat in 2013 of the "freak year" of 2012, when persistent and heavy rains left only 3% of UK wheat making top milling grade.
After a poor autumn sowing season and a cold spring "there were large question marks over what the crop was going to be when it was harvested, even before the debate about what the quality was going to be," Mr Watts said.
"With this large uncertainty, imports were lined up just in case."
However, with this year's harvest turning out to be - while small, at a 13-year low of 12.1m tonnes - of "good quality… there is less need to import high quality milling wheat", Mr Watts said.
Uncertainty had in fact shifted to the feed market, in which, with millers and industrial users set to take a large chunk of the 2012 crop, there was less wheat available for livestock farmers.
This had already been reflected in the decline in the UK milling wheat premium, which has fallen close to £10 a tonne, less than half typical levels – a reflection of the strength of feed wheat prices.
"This year, the UK has gone from having some of the cheapest feed wheat in Europe to some of the most expensive," he said.
Wheat vs corn vs barley
That had put other grains firmly on the map, including corn, against which wheat has returned to trading at a rare premium, comparing London November 2014 feed wheat futures with their Paris maize counterpart.
Current wheat prices do not negate "the rhyme or reason for feed wheat", but are likely to boost the case for corn, "particularly in the poultry sector", Mr Watts said.
Meanwhile, the UK has a bumper barley crop too to shift, up 29% at a 16-year high of 7.1m tonnes, a reflection of the large expanses of wheat growers were unable to plant in autumn last year, but which was largely sown with spring barley instead.
And this when the European Union has phased out the intervention programme which supported values of the grain.
"The largest crop in modern times not be balanced by intervention buying," Mr Watts said, although underling ideas of UK merchants undertaking a strong export programme, before supplies from the important Argentine and Australian harvests.
UK co-operative Openfield on Monday unveiled the shipment of a 50,000-tonne cargo of feed barley to Saudi Arabia, carrying grain gathered from 100 farms.
'Love triangle going on'
The outcome was likely to be a grains market "highly sensitive" in demand patterns to price movements in demand, Mr Watts said, terming it a "love triangle" between the grains.
"The UK has a feed grain love triangle going on," he said.
In fact, the market may see a fourth participant, oats, playing a role too, after the UK produced what may have been its largest crop in 40 years, Mr Watts told Agrimoney.com.
Traders have pegged the UK oats crop at about 1m tonnes, again a reflection of the extent of vacant land to sow in the spring, and production well in excess of domestic consumption of some 700,000 tonnes.