10-year high imported wheat milled: Grain market daily

• UK feed wheat futures (May-25) ended yesterday at £190.25/t, down £2.65/t from Tuesday’s close. The Nov-25 contract fell £2.20/t over the same period, to close at £194.25/t.
• Domestic wheat futures followed the Paris grains markets yesterday. Paris grains prices were under pressure from FranceAgriMer’s updated forecasts of French exports and ending stocks. Updated figures for France's forecast export of wheat and barley in the current marketing year are lower than expected in December. As a result, forecast ending stocks of wheat and barley in France are higher than previously estimated. Even maize could not resist and also came under pressure from the historically high level of ending stocks in France.
• May-25 Paris rapeseed futures closed at €538.00/t yesterday, up €0.25/t from Tuesday’s close.
• Chicago soyabean futures (May-25) were down 0.6% on yesterday’s close, despite the National Oilseed Processors Association (NOPA) showing record in US crush data for December. Chicago soyabean futures traders fixed profit from the recent rally, while worries about soyabean exports after the inauguration of the US president also weighed.

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Today we have updated data on UK human and industrial cereal usage and GB animal feed production.

Focusing on the data for UK flour millers (including for starch and bioethanol), cumulative imported wheat milled from July to November was at a 10-year high of 678.5 Kt. So many factors stimulated additional imports of milling wheat into the UK, primarily lower domestic wheat production and quality issues in 2024. The historically higher level of sterling against the euro also supported grains and oilseeds imports into the UK.  

Total wheat milled in the UK from July to November 2024 is 5.7% down on the year but in line with the average of the last five years. This means that imported wheat milled is replacing the home grown wheat milled. In fact, cumulative home grown wheat milled (from July to November 2024) is at a 30-year low. Even in the 2020/21 season, the cumulative home grown wheat milled from July – November was 1,811.3 Kt, which was slightly higher than the current season’s 1,807.4 Kt.

Cumulatively total flour production is down by 6.8%. However, this is mainly due to lower ‘other flour’ production, with only a 2.4% reduction in bread-making flour production. Data on production of ‘other flour’ is often used as a proxy for demand from the starch and bioethanol sectors. From July to November 2024, 370 Kt of ‘other flour’ was produced, 26% less than the same period in 2023 and the lowest since 2011/12. Please note, full season data is not available for 2020/21.

This decrease is largely driven by a fall in demand by the bioethanol industry, with neither UK plant expected to run at full capacity, with margins under pressure. Furthermore, maize usage is expected to be relatively strong this season, stealing demand from wheat. For the season as a whole in November AHDB forecast a 11% rise in human and industrial usage of maize from 2023/24. This follows competitive pricing of maize and concerns over the RED II status of domestic supplies.

Looking ahead, demand from the flour milling sector expected is relatively similar to last season, but demand from bioethanol sector is a key watch point. Price relationships will also be important. The recent weakening of sterling against the US dollar and the euro may also make wheat imports look less attractive.

AHDB’s next forecasts of UK cereal supply and demand are due on Thursday 30 January.

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