Bullish news limiting harvest pressure

Seasonally, we’d expect to see an element of price pressure as Northern Hemisphere wheat harvests start, but currently we are experiencing quite the opposite.

Over the last fortnight, nearby Paris wheat futures and Chicago wheat futures have gained 6.9% and 12.5%, respectively.

This rallying support has been off the back of dry conditions for North American spring wheat, an estimated reduction in the Russian wheat crop and delayed harvests in Europe. The latest FrenchAgriMer report estimates that only 4% of French soft wheat is harvest up until 12th July, significantly behind last year which was at 42% at the same point.

All this bullish news has supported the domestic November 2021 wheat futures contract, it gaining over £11.00/t in the last two weeks, to close yesterday at £178.40/t.

Harvest pressure for 2021?
For Paris wheat futures, the seasonal pressure usually starts in the first week of August and continues until the middle of September, as harvests increase available supply.


As you can see the in graph above, the 5-year-average demonstrates the pressure on nearby prices as we get into the depths of harvest, averaging £4.50/t throughout the month of August.

The only time the nearby contract gained in the last 5 years was in August 2020 (+£5.98/t), due to the bullish rally in the market from global demand and introduction of export taxes and tariffs from some countries.

Will sellers take the bull by the horns?
All this bullish news is supporting prices for harvest. Delivered feed wheat into East Anglia for harvest was quoted at £169.00/t last Thursday, gaining £6.00/t as published in the AHDB delivered survey.

This may attract more sellers to the market, allowing them to free up room and mitigate risk if storage space at harvest is sparse. However, with Nov-21 and May-22 contracts at supported levels, the cost of storage needs to be balanced against future sale opportunities.

Bullish news limiting harvest pressure
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LIVE - DEFRA SFI Janet Hughes “ask me anything” 19:00-20:00 20th September (Today)

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Hello, I’m Janet Hughes. I’m the Programme Director for the Future Farming and Countryside Programme in Defra – the programme that’s phasing out the Common Agricultural Policy and introducing new schemes and services for farmers.

Today (20 September) between 7pm-8pm, I and some of my colleagues will be answering your questions about our work including the Sustainable Farming Incentive, Farming in Protected Landscapes, and our test and trials.

We’ll try to answer at least 15 of your top voted questions, so please vote on the questions you’d most like me to answer.

You can read more about our Future Farming policy on our blog.

I’ve answered some of your questions previously: you can watch the videos on...