Domestic and global factors have combined to put pressure on grain prices, but there is still no sign of a significant drop in values.
At the beginning of this week (October 24), November 2022 wheat futures prices were at 267/tonne on the London market. That represented a 26/t drop in values from early October and was 85/t off the peak set in May this year. However, farmers can still lock in a price of 267/t for November 2023.
Simon Ingle, of Frontier, said: 鈥淲orld wheat markets dropped sharply, with traders optimistic for a renewal of the Black Sea export corridor agreement which will allow Ukraine to continue to ship its agricultural produce.
鈥淯N officials remained hopeful the deal would renew next month, but President Putin is reportedly uncertain on whether the renewal would be beneficial for Russia.鈥�
Russia will want to be able to export much of its 47 million surplus from the 2023 wheat harvest, most of which will need to travel through the Black Sea.
At home, AHDB estimates UK wheat production to be 15.664mt, which is 12 per cent more than last year, while larger stocks mean the availability of wheat is 1.337mt higher at 18.735mt. Stocks available for exports or UK storage are more than double that of last year at 2.010mt.
Anthony Speight, senior analyst at the AHDB, said: 鈥淎lthough prices have eased a little over the last few weeks, the UK is still in a very good position this season.
鈥淚t has large wheat and barley stocks at a time of underlying global shortage and tension and the devaluing of the pound since the beginning of the year against the US dollar will help wheat exports. Meanwhile, there is enough to cover home needs.鈥�
He added that the next big event the global grain market will be watching out for is the Argentine maize harvest. Plantings are still behind but some much-needed rain has fallen, with the progress of this year鈥檚 La Nina climatic system key to the country鈥檚 harvest fortunes.
