Wheat prices have fallen to their lowest level in over 12 months amid turbulence in global grains markets.
UK feed wheat futures (November 2019) dipped to £143.0/tonne on Tuesday, 3.5% down on the average in July 2019 and their lowest level since March 2018.
It follows a dramatic drop in Chicago wheat and maize futures, which both plummeted 6% on Monday in reaction to the USDA’s latest World Agricultural Supply and Demand Estimates (WASDE) report.
The WASDE report raised US maize production estimates to 353.1 million tonnes, which is 5.4% above average industry expectations, said AHDB analyst Aidan Wright this week.
“Increased yield expectations meant that US maize production estimates were raised from July’s report, despite a fall in planted area,” he added.
The USDA revised down global wheat ending stocks by 1.1 million tonnes but they “are still estimated to be at record levels”, Wright said.
UK wheat futures have followed a downward trend since peaking at £186.3/tonne in July 2018, when Europe was in the grip of a prolonged heatwave.
The UK, France, Germany and Poland are all expecting bigger crops this year due to an increase in planted areas, with harvests largely unscathed by this summer’s hot weather.
The soft wheat crop in France is expected to reach 28.2 million tonnes, which is up 12% year on year and would be the country’s largest since 2015.
The UK is also expecting a bumper wheat crop this year. AHDB’s early bird survey released in late 2018 suggested the planted area for wheat is the biggest since 2014.
Ex-farm volumes of feed wheat for August delivery reached 59,000 tonnes, which marks a “significant rise” on previous weeks and is “a signal of large crops”, said Wright.
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