UK wheat follows global prices down

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Last week saw considerable pressure across the board for global grains, especially for old-crop prices.

Chicago wheat and Paris wheat markets (May-23) fell 7% and 4% respectively last week, pressured by competitive Russian wheat picking up global demand and optimism for an extension of the Black Sea Initiative (Ukrainian export corridor). US markets were closed on Monday for a public holiday, but later in the week saw added pressure from a strengthening US dollar.

Volatility is still expected in wheat markets short term, as we rapidly approach the 19 March deadline for the Black Sea Initiative renewal. Ukraine is reportedly asking the UN and Turkey to start talks with Russia, with Ukraine looking to extend the deal for at least one year and to include the ports of Mykolaiv. It is understood markets anticipate a renewal of the initiative, as the most likely scenario. Though the detail will be important. How long is it extended for? Extra ports included? Vessel inspection to be sped up?

Despite the overall price falls last week, the Buenos Aires Grain Exchange trimmed the 2022/23 maize production estimate down 3.5Mt, to 41Mt. The impact of dry weather on late plantings is still being assessed, though arguably the news was already factored into prices.

UK feed wheat

UK feed wheat futures (May-23) fell £14.25/t last week, to close on Friday at £227.00/t. This followed global grain markets, particularly European market movements. New-crop futures (Nov-23) saw less pressure on the week, falling £5.90/t over the same period to close on Friday at £231.00/t. Moving new-crop prices to a premium to old-crop.

Domestic delivered prices followed futures movements (Thursday to Thursday). Feed wheat delivered into East Anglia (Mar-23 delivery) lost £7.00/t last week, quoted on Thursday at £232.00/t.

Bread wheat delivered into the North west (Mar-23 delivery) fell £8.50/t last week, to be quoted on Thursday at £310.50/t. New-crop bread wheat into the North West (Nov-23 delivery) was quoted on Thursday at £315.00/t, £81.00/t over the UK feed wheat (Nov-23) futures close on the same day.

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