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NOVEMBER 2023 futures prices on the London exchange rose by more than £5/tonne in the week to Friday 20 October, but by the beginning of this week they had slipped £2/tonne. 

Gains in European prices, reduced yield estimates for US corn and soya and a smaller than expected UK crop helped give the market support. Latest Defra estimates put the UK wheat crop at 14.1 million tonnes, down from earlier estimates of up to 16 million tonnes.  

Estimates 

The AHDB's first supply estimate for the 2023/24 season estimates that the volume of wheat available for export or as free or available stocks is 734,000 tonnes, a little over a third of what it was in 2022/23. Anticipated increased use for feed, human and industrial consumption has also helped tighten stocks. Barley production is estimated to be 5 per cent lower than last year at 7.385 million tonnes, with use down 2 per cent to 6.021 million tonnes, leaving a surplus of 1.516 million tonnes for export or as free stocks. 

"The global and UK markets are still relatively well supplied, but weather concerns over the Southern Hemisphere crop and geopolitical events have the potential to give the market more support in the coming months," said Anthony Speight, senior grain and cereals analyst at AHDB. 

Read more: An eye on the grain market: UK wheat futures have seen a volatile trading week

Quality

Quality continues to pay dividends too, said Mr Speight, with bread wheat trading at £80/tonne premium over feed, twice that of recent years. 

"A lack of bread-making quality combined with a large volume of feed wheat has pushed up premiums and will mean there is a need for more imported milling wheat from suppliers such as Canada, France and Germany," he added.  

Read more: UK grain markets find limited support from volatile global market

Conflict

Unlike Russia's invasion of Ukraine, the conflict in the Middle East has yet to have a big impact on the grain market and will probably not have unless there is an unwelcome escalation in hostilities. 

"Developments in the Middle East are making headlines, but unless it escalates to Iran and/or Egypt, we do not see any meaningful impact yet on global grain trade," said Rupert Somerscales of Agri-Analytics UK in ²ÝÁñÉçÇø Guardian's Eye on the Grain Market newsletter.

"Energy markets are jittery, though, since Iran is such a big player and any rush to safety may strengthen the US dollar." 

For those wanting to lock in future prices November 2024 and November 2025 feed wheat is trading on the London ICE market at £203/tonne. The only time that year ahead November wheat was trading at more than £200/tonne in October of the previous year was last year.