AHDB publishes supply and demand estimates for wheat

In 2024-25 total domestic consumption of cereals is estimated at 24.18mt, down 2% on the year but in line with the five-year average. The reason for the drop in consumption is the drop in demand for grain being used for animal feed production and demand from the human and industrial sector is also forecast to fall due to drop in demand from the bioethanol industry.

Overall, the drop in supply of total cereals for harvest 2024 is more than the decline in domestic consumption so we can expect a tighter balance of UK cereals throughout the 2024-25 season at 5.39mt, down 14% on the year. Since the start of the 2024-25 marketing year in July total wheat used for milling has reached 2.0m tonnes by the end of October which is 8.1% less than for the same period last year.

UK feed wheat futures have tracked the direction of global wheat markets and recently May 2025 futures were at £194.40/t before falling back to £183.55/t which was the lowest May contract since early May this year. Currently May 2025 futures stand at £187.35/t and November 2025 stands at £188.45/t. UK feed wheat delivered December in England was quoted at £182.50/t which was £7 down on the week and Bread wheat delivered to the Northwest of England for February was quoted at £235.50/t , down £6.50 from the previous week.

Tensions in the Black Sea region increased last week as Russia and Ukraine fired missiles at each other and this development raised significant concerns about possible disruption to an already tight export outlook for the year. While exports are forecast to fall this year, both countries will still have large tonnages of wheat to export, but any further escalation of the conflict could put a large proportion of wheat at risk.

From July to November Russian wheat exports totalled 24.2mt and Ukraine’s wheat exports reached 8.7mt over the same period. These figures represent year-on-year increases of 6% for Russia and 58% for Ukraine. These two countries are expected to export a combined 64mt of wheat during this marketing year. This represents about 30% of the global wheat supply, projected at 214.67mt. So far both countries have exported a total of 32.9mt, leaving 31.1mt still to be exported.

The announcement of the Russian wheat cap export helped to support wheat prices but in response to a further sanction from the US, the Russian rouble has fallen to its weakest value since March 2022, which could slow down Russian exports further. The Russian wheat cap which was announced on November 29 implements an export quota of 11mt from February 15 to June 30.

European wheat exports were boosted following US president incumbent Donald Trump’s announcement of a 25% tariff on imports from Canada and Mexico as well as an additional 10% tariff on imports from China. However, the EU wheat market was under pressure from a strengthening euro against the US dollar and low export demand for EU wheat.

The EU has exported 9.92mt of wheat this season of which 95% is soft wheat and this total is 31% down on last year. The EU imports are down by 17% this season, having imported 4.549mt so far. Nigeria is the top importer of EU wheat this season and has imported 1.614mt so far which is up 16% from last year.

As mentioned earlier Donald Trump intends to impose a 25% tariff on imports from Mexico which could see Mexico buying less US maize. On average, over the past five years, Mexico has accounted for 32% of US maize exports so there are concerns about how this could impact the US maize export campaign. In Brazil 59% of the first maize crop was planted by November 24 and they are looking at a maize crop of 132.7mt.EU maize imports since last July and up to 1st December total 8.51mt, up 10.4% from 7.71mt last year.

The US have exported maize to Mexico, EU, China Japan, South Korea and Vietnam but China with US imported maize total of 16m tonnes is the lowest tonnage bought in the last four years and more active maize imports from China could support prices but with the new tariff being announced there is now much uncertainty in the marketplace regarding maize. Maize prices have an impact on UK feed wheat futures and if maize prices come under pressure this could put pressure on UK feed wheat but if global maize markets are supported by stronger Chinese imports this could help UK feed wheat prices. The EU commission have forecasted their maize production at 59.6mt which would be 3% less than last year with France producing 13.9mt which is up from 12.6mt last year.

There is little malting barley being sold due to several factors and one being the good quality of spring barley last harvest and plenty of it. Beer consumption has dropped by 2% therefore reducing demand for malt. There is also a larger carryover from 2023, again reducing demand. There is also more global competition between maltsters, plus Australia along with Argentina are having a bigger barley harvest than expected.

Things could change as expected in the UK where the winter barley area will drop next year, and the spring barley is forecast to be down by 13% from last year. The feed barley discount to wheat has dropped again from around £30 to £20 as wheat futures and prices have dropped resulting in less grain being sold off farm. Some parts of the UK suffered worse than other areas with wet weather during the autumn and it has been reported that only 57% of the barley sown is now in good to excellent condition due to delayed planting and inclement weather in some areas of the UK.

As of 25th November, 73% of winter oilseed rape was rated as in good or excellent condition which compares to 52% of winter oats and 45% of winter wheat. This shows how the weather made planting difficult this past autumn once again though with a huge variation across the UK. Recently the AHDB published its Early Bird Survey which projects the UK wheat area to rise but the rapeseed area to fall, provisionally projecting a 17% fall in planted area in 2025.

If confirmed, this would reduce the oilseed rape area to its lowest level in the UK for 42 years. UK ex farm prices are now approximately £30 lower than they were at the peak on November 9, this is because of buyers being able to buy more locally and from imported sources like Australia due to farmer selling at the recent higher prices. Canadian canola is now cheap enough to export to Europe following the recent news of the US imposing a 25% tariff on Canadian goods.

The EU is forecasting a rapeseed crop in 2025 of 18.7mt up 12% from 16.7mt in 2024. EU rapeseed imports this season have reached 2.40mt as of 24 November, up 8% from 2.22mt during the same point last year of which 70% came from Ukraine and 20.3% from Australia. Rapeseed delivered Erith for February is quoted at £427.50/t which is £9 down on the week and followed the high volatility of the Paris rapeseed futures last week, in addition sterling closed recently at its highest level against the euro since November 14 2024.

Donald Trump intends to impose a 25% tariff on imports from Mexico which could see Mexico buying less US maize. On average, over the past five years, Mexico has accounted for 32% of US maize exports so there are concerns about how this could impact the US maize export campaign.