Lower yields put further pressure UK wheat balance: AHDB

UK wheat production for the 2017/18 marketing year is down 326,000 mt to 14.84 million mt, the UK’s farming agency Defra said Monday in its final update on the UK’s arable land use.

While the figure revises down October’s production estimate from 8.5 mt per hectare to 8.3 mt per hectare, total estimated wheat output remains 2.2% above the five-year average.

While the headline production figure still looks positive despite the downwards revision, there is still cause for concern.

Peter Collier, an analyst at the UK’s farming board AHDB, pointed out in a research note Thursday that “the lower 2017 wheat production number means the UK wheat supply and demand balance is even tighter than what the figures in the first Defra 2017/18 UK cereals balance sheet suggest.”

Defra had previously estimated the UK wheat balance to have 2.65 million mt of surplus, 18% lower than during the previous marketing year.

With the UK’s minimum stock requirement of 1.6 million mt, UK export availability was estimated at 35% lower than the previous marketing year.

This tightness of supply has been reflected in the UK’s exports to date in the current marketing year, with the most recent EU customs data showing a miniscule 1,914 mt of export to date – down from 55,210 mt at the same stage last year.

Imports, meanwhile, have come in at 251,312 mt so far in the 2017/18 marketing year, which puts further pressure still on the UK’s wheat balance given last year had already seen 304,019 mt brought into the country.