The sustained wet weather that the UK has experienced since October 2023 has significantly reduced the acreage of winter wheat being sown. Those that did make it into the ground will struggle to reach their full potential.
This will lead to much less new crop of UK wheat being offered from the 2024 harvest. With quite a large amount of 2023 harvest wheat still to be marketed, along with a higher new crop value from September/October, there could be a larger carry-over of wheat through into the 2024-25 trading season.
Crop conditions
Wheat
As already mentioned, the 23/24 autumn and winter have been tough on arable crops, and many fields have never been dry enough at any point since October to allow any type of cultivation, let alone the drilling of winter wheat.
This has left many bare fields, which are now likely to be used for spring-sown cereals – wheat, barley, or oats – which will lead to lower-yielding crops and less wheat since there is limited availability of spring wheat seed.
A large proportion of the wheat that was sown is looking badly stressed due to the conditions over the last months, particularly those not sown until October. Recent improvements in ground conditions have allowed some poorer crops to receive a first application of fertiliser. The next few weeks will show how these crops have responded and how far they will have to go to recover.
Barley
The vast majority of winter barley crops were sown early enough to be well established before the poorer weather really took a hold. So, at this point, they are in quite good shape. Most of these crops will likely have received some fertiliser with the aim of promoting strong spring growth after a testing winter. Much like wheat, a judgement towards the end of March will give a fairer picture of what the crop potential is likely to be.
Markets
Wheat
Since the start of 2024, there has been a substantial revaluation of wheat within the UK and particularly Scotland. For example, the March ’24 position fell and an ex-farm price of £15 on the 3rd January to, at the time of writing, one of £167. The carry through to new crops has also diminished slightly but is still there with an October price of £186 ex-farm showing £19 over the current March price.
Much of this depreciation has been due to the continuing aggressive selling of wheat from Russia and Ukraine, which has maintained downward pressure on global markets. The lack of competitiveness from the UK and Europe can be identified by lower export figures than in previous seasons.
Further pressure on prices has come from a comfortable supply position with a quitter domestic market. In Scotland, the weaker wheat position has been exacerbated by an erosion of the premium over futures, which normally gives the Scottish market a stronger base over the rest of the UK.
As already mentioned, the new crop position is carrying quite a healthy carry over the current values, which is down to the acceptance that there will be a need to import wheat into the UK following this harvest, despite a large carry-over of the ’23 harvest tonnage. The new crop situation is further pressured by Western European crops under similar pressure to the situation being experienced in the UK.
Barley
The feed barley has been quite flat throughout the year with farm-to-farm positions being the best value options around keeping some ex-farm prices around £160.
The availability of barley is much tighter than wheat, but this is being balanced by softer domestic demand coming forward. With so much ground designated for wheat not being sown, there is an expectation that the area being sown down to spring barley will increase quite substantially. This is particularly the case in England and could have the effect of keeping barley prices down heading into the 2024-25 season.
There is good demand for malting quality barley, which could be the one area which lends some support to the barley market.