Record volumes of wheat milled by UK millers
A record 641,000t of wheat was milled in the UK in September, according to DEFRA data released this week, up 112,000t from the previous month and 16,000t higher than the previous record set in September 2012 (which includes ethanol and starch producers).
Analysing the data HGCA analyst Arthur Marshall said top-quality domestic milling wheat supply is anticipated to be tight this season, despite the larger UK wheat harvest.
He said only a small proportion of group 1 wheat has achieved full bread wheat specification, which the market will have to ration.
Reflecting this, Marshall outlined that UK full-spec bread milling premiums over feed wheat have been stable at around £40/t since September, both for current and forward delivery.
He says demand may not yet have responded to these price signals sufficiently, with lower wheat prices than last season likely stimulating usage.
Marshall said steady milling premiums since September offer no reason to expect a change in usage patterns to date, adding further pressure on already tight supplies. He added the recent stability in milling premiums may be premature.