There is set to be a substantial increase in the amount of old crop wheat carried over in the UK this year, according to Brenda Mullan, Senior HGCA Analyst.
Mullan says for most of this season its been known that at the end of June, the UK is likely to have a substantial carry-over of wheat compared with earlier years.
In the UK a big crop, combined with low farm gate prices, has led to the situation where there is almost 60% more wheat forecast to be in commercial end season stocks than last year, according to the latest update of Defra’s cereal supply and demand figures.
Mullan says while commercial end-season stocks at 3.1Mt are at the top end of Defra’s range, the low end of the range still accounts for a notable increase on last year (the range is represented as the shaded area in the bar chart below for the 2014/15 forecast).
Taking the estimated minimum level that processors need in reserves to tide them over until the new crop is available and ready for processing, Mullan says this means that ‘free stock’ could reach 1.6Mt this season, over three times what was left last year.
Animal feed use
She says the fourth official update of the grain balance sheet also highlighted the better than expected demand for animal feed than had been anticipated in earlier forecasts.
According to Mullan despite this year being fairly typical in terms of weather conditions and good grass growth, (total cereal animal feed demand is only up 1% on last year), demand across the cattle, sheep and pigs sectors has driven an upward revision to the previous estimate by 251Kt, to 11.4Mt.