Old crop Group 1 Milling Wheat demand

Following the bumper wheat crop of Harvest 2019, milling quality was readily available and farmers were willing sellers ahead of the original Brexit date of Oct 31st 2019.  UK millers participated heavily into UK Group 1’s, buying UK wheat stem from merchants and extending their cover from Sept19 through until Mar20.  However, instigated by the problems of winter wheat drilling, values for full-spec milling wheat have increased by £25/MT.  This increase in domestic values has been sustained as merchants and millers are committed to using and supplying Group 1 in their milling grists until the end of this month.

Looking forward, UK millers do not have sufficient milling wheat cover for the end of the season (Apr20 through Jul20) and will need to enter back into the market as buyers.  However, German ‘A’ milling wheat
imported values delivered to Scotland/N. Ireland are approximately £12/MT cheaper than the value of UK Group 1’s.  This puts a cap onto the value of old crop UK milling wheat, and removes the anticipated demand.  In addition, as European grain markets continue to fall in an attempt to place the large wheat surpluses, it lowers the price of UK wheat.

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