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UK wheat crop pegged at top end of forecasts, underlining need for export spurt

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The UK wheat crop looks like have reached the upper end of forecasts, the AHDB said, highlighting concerns in tackling a “large exportable surplus” if the country quits the European Union without a trade deal.

 

The AHDB pegged UK wheat production this year at 16.19m tonnes, up 2.63m tonnes year on year, and the highest result since the 16.51m-tonne harvest recorded in 2015.

 

The forecast was derived on updated data, after UK agriculture ministry Defra on Thursday unveiled a figure of 1.68m hectares for wheat plantings in England, which accounts for the vast majority of the UK crop.

 

On yield, which farm consultancy Adas, in its final harvest report of the season, pegged on Friday pegged the average result at 8.8-9.0 tonnes per hectare, ahead of the five-year average of 8.3 tonnes per hectare.

 

‘Concerning’

The “large” crop “will undoubtedly push us into a net export trade position”, said Alice Baily, analyst at AHDB, seeing the same dynamics for barley too, for which the bureau forecast a record harvest of 7.53m tonnes.

 

However, this could present a headache if the UK leaves the EU as scheduled at the end of next month, but without have sealed a trade deal with what is its biggest grain export market, leaving the prospect of a tariff on cargos.

 

“The prospect of a no-deal Brexit is concerning when we face a large exportable surplus,” Ms Baily said, with trade ideas of an exportable surplus of 2.0m tonnes or more.

 

In 2015-16, the last time the UK was a net wheat exporter, it relied on the EU for 80% of shipments.

 

‘Almost fully committed’

The comments come amid widespread talk of a build-up of grain stocks at port, as shippers rush to maximise shipments ahead of the October 31 deadline.

 

UK merchant ADM Agriculture said “all ports are almost fully committed for September and October as shippers have put business on the books for the period up to the supposed Brexit day.

 

“Because of tariff concerns, almost no export business is possible beyond that date,” it said, adding that “it does not look like any clarity with regard to trading rules will be apparent much before the EU summit of October 17-18”.

 

According to ODA, even as of last week about half the UK’s wheat exportable surplus for 2019-20 had been booked for shipment, “leaving a far less daunting export programme in place for the remaining months of the season”.

 

Barley discount

However, there remains some talk, given price performance, that barley traders have not had quite the same level of success in booking shipment of a sizeable exportable surplus of the grain too, after a harvest pegged at by the AHDB at a record 7.53m tonnes.

 

That figure, up a little over 1.0m tonnes year on year, factors in Adas yield estimates of 7.4-7.6 tonnes per hectare for winter barley, and 5.8-6.0 tonnes per hectare for spring, above five year averages of 7.0 tonnes per hectare and 5.6 tonnes per hectare respectively.

 

On area, Defra pegged English plantings at 831,850 hectares.

 

With the UK typically consuming about 5.7m tonnes of barley a year domestically, the strong harvest creates potential for exports well above last season’s 863,000 tonnes.

 

CRM AgriComodities noted that the discount of feed barley to feed wheat “continues to widen, currently standing at about £15 a tonne, compared with just £5 a tonne last year and £11 a tonne on a five-year average for this time of the season”.

 

Rapeseed slide

The AHDB also pegged the UK’s oats harvest a record high, of 1.04m tonnes, up from 850,000 tonnes last year, after Defra pegged English sowings at 142,850 acres.

 

Adas estimated yields at 5.5-5.7 tonnes per hectare, in line with the five-year average.

 

For rapeseed, the AHDB estimate UK production at a 15-year low of 1.77m tonnes, based on ideas of English sowings at a 13-year low of 492,080 hectares, and a yield just below the average of 3.5 tonnes per hectare.

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