Wheat markets are set to remain tight this year despite a global harvest which is expected to increase, suggest the latest estimates.
Initial forecasts for the coming season suggest rising consumption will more than offset slightly higher yields from a slightly lower wheat area – causing global wheat stocks to tighten, says the International Grain Council (IGC).
The IGC published its first estimates for the 2024/25 season last month. It expects consumption to match last year’s record levels and exceed production, leading to a further reduction in stocks to a six-season low.
Limited prospects
Closer to home, the wet autumn and winter has limited the prospects for winter wheat crops across Europe – including the UK. Many growers are still to make spring planting decisions after being unable to get winter crops in the ground.
Wet conditions continue to negatively impact 2024 winter crops across much of north-western, central and eastern Europe, says cereals and oilseeds senior analyst Helen Plant at the Agriculture and Horticulture Development Board
The gap – or carry – from May-24 UK feed wheat futures prices to the new crop Nov-24 contract had widened to almost £15/t by mid-January – giving growers more incentive to store or sell forward 2023 wheat for new season (2024/25) delivery to supplement the 2024 harvest.
Higher costs
“A wider gap than in recent years is expected due to the higher interest rates and energy, increasing the cost of money and storage costs,” says Ms Plant. “However, the carry is the largest for the time of year in recent years.”
While there’s been a general dip in global grain prices, UK feed wheat futures for May-24 have fallen by more, says the AHDB. This may be linked to exchange rate changes or UK 2023/24 supplies feeling heavier – or a combination of both.
“The carry offered in the futures market doesn’t always exactly line up with what’s offered in the physical market. So, it’s important to check with your local merchant(s) about the carry and what demand is there currently.
Storage costs
“However, if on-farm storage costs are less than the carry the market is offering, it could present a marketing opportunity. It’s worth noting though that the carry will continue to evolve as information changes on expected supply and demand in the rest of this season and next.”
UK wheat production is likely to fall in 2024 after the wet weather through the autumn disrupted winter planting. AHDB’s Early Bird Survey captured planting intentions as of early November and pointed to 3% drop in the wheat area.
The AHDB is re-running the survey to provide insight into what the cropped area might be for harvest 2024 following the wet weather. The results of this survey are due in the first two weeks of March – and anecdotal evidence suggests some fields will be left fallow.
Tips for winter grain storage
1. Proper storage conditions
Ensure your grain storage facilities are well-maintained and equipped with proper ventilation. Adequate aeration helps control temperature and moisture, preventing the development of mould and fungi that could compromise grain quality
2. Regular monitoring
Implement a routine monitoring schedule to check the condition of stored grains. Regular inspections allow you to identify potential issues early, enabling prompt action to mitigate risks and maintain optimal storage conditions.
3. Temperature control
Maintain consistent temperatures within the storage facility. Fluctuations in temperature can lead to condensation, which may promote the growth of microorganisms. Utilise temperature monitoring systems to ensure a stable environment.
4. Humidity management
Proper humidity control is crucial to prevent moisture-related problems such as mould and mycotoxin development. Invest in dehumidifiers or other moisture control measures to keep humidity levels within the recommended range for your specific crop.
5. Pest prevention
Implement effective pest control measures to safeguard stored grains from insect infestations. Regularly clean and inspect the storage area, and consider using traps or insecticides to prevent pests from damaging your grain stock.
6. Quality testing
Conduct regular quality tests on stored grains to assess factors such as moisture content and grain condition. This proactive approach helps you identify any deterioration early on and allows for adjustments to storage conditions or the sale of compromised grain before quality declines further.
7. Proper loading and unloading procedures
Follow best practices when loading and unloading grains from storage. Use equipment designed for gentle handling to avoid damaging grains during these processes. Proper handling minimises the risk of physical damage, which can lead to spoilage or decreased quality over time.
