5. Forward futures prices
- unusual ‘carry’ into the new crop
120
122
124
126
128
130
132
134
136
138
140
£pertonne
Source: AHDB/HGCA
6. Ten year UK bread milling wheat premiums
- historically high, so probability points to
lower levels in 2015/16
0%
10%
20%
30%
40%
50%
60%
70%
0
10
20
30
40
50
60
Premiumasa%offeedbaseprice
UKex-farmbreadmillingwheatpremium(£/t)
Premium (left axis) Premium as % of feed base (right axis)
Source: AHDB/HGCA
8. Global wheat prices – UK futures returning
to discount to global futures
90
115
140
165
190
215
240
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
£pertonne
Chicago wheat UK wheat Paris wheat Minneapolis wheat
Source: Reuters
9. A second year of global grain surplus
– stocks not a concern for spot markets
1,500
1,600
1,700
1,800
1,900
2,000
2,100
ProductionandUtilisation(Mtonnes)
Wheat & coarse grain production
Wheat & coarse grain utilisation
10
15
20
25
30
Stocks-to-useratio(%)
Wheat stocks-to-use ratio
Coarse grain stocks-to-use ratio
Source: FAO
11. 2015 wheat areas – Slight increase in world
harvest area forecast, but lots still to plant
20
25
30
35
40
45
50
N America EU FSU
Mha
2013
2014 est.
2015 proj.
Source: IGC
13. UK wheat overview
- the wrong type of wheat?
10
11
12
13
14
15
16
17
18
Mtonnes
UK wheat production Return to net-exporter, but
exports have been slow so
far.
Currency is making UK wheat
uncompetitive into Europe, but
competitive on dollar terms.
Export fortunes could change.
A limited group 1/2 area and low
protein means we are suffering
from ‘the wrong kind of wheat’
= more imports and more exports.
Source: Defra
14. Bread flour dominates UK flour
production
0
500
1000
1500
2000
2500
3000
3500
4000
Thousandtonnes
Biscuit, cake, ingredients and household flours Bread making flour
*Jul-Dec Source: Defra
15. GB wheat quality – protein is the issue
2013 2014
Percentage of GB Group 1 wheat samples that
meet full specification (76Kg/hl, 250s, 13%)
Source: AHDB/HGCA Cereal Quality Survey (final results)
16. Quality and premiums - EU/global
issues prevent imports from capping the
premium, but.....
0
5
10
15
20
25
30
35
40
45
0 10 20 30 40 50 60
Ex-farmbreadmillingpremium(£/t)
% of Group 1 samples meeting full spec (13%, 250s, 76Kg/hl)
2008
2012
2003
2013
2009
2014
Source: AHDB / HGCA
17. Getting closer to import parity again
-20
-10
0
10
20
30
40
50
100
120
140
160
180
200
220
PremiumonGerman“A”overUKfull
specgroup1£/t
Price£/t
Premium
German "A" Wheat, CIF east coast
UK full spec bread wheat ex-farm
Source: AHDB/HGCA
18. Long term protein % in GB wheat – lowest
since 1998
10
10.5
11
11.5
12
12.5
13
13.5
Proteincontent(%)
Source: AHDB/HGCA
19. Narrowing the yield gap between
group 1 and 4 – could make the barn
fillers more marketable
85
87
89
91
93
95
97
99
101
103
105
107
109
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
RLyield
Top group 1
Bottom group 1
Top group 4
Bottom group 4
Source: AHDB/HGCA
20. Take home messages
Lots of feed to mid quality grain around in the world this season…
… Giving the UK an issue with too much of the ‘wrong’ type of
wheat…
… But will new varieties on the UK scene increase supplies of the
‘right’ type of wheat in coming seasons?
But premiums are unlikely to be this high next time round.
Far too early to judge the new crop given the increasing
dominance of spring cropping.
