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Latest cereal supply and demand report shows small surplus before exports
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<blockquote data-quote="Agriland RSS" data-source="post: 7432655" data-attributes="member: 105608"><p><img src="https://s3-eu-west-1.amazonaws.com/files.thefarmingforum.co.uk/images/agrilanduk.JPG" alt="" class="fr-fic fr-dii fr-draggable " style="" /></p><p></p><p>Written by William Kellett</p><p></p><p>The Agriculture and Horticulture Development Board (AHDB) has published its latest Cereal Supply and Demand Estimates report.</p><p></p><p>The estimates are based on data through to December 2020 and industry discussions. The balance sheet shows the deficit from November removed, with a surplus of 73 thousand tonnes before exports are taken into account.</p><p></p><p>Through to December, the UK had exported 116.7 thousand tonnes of wheat; adding this figure into the balance sheet leaves a 43.7 thousand tonnes deficit.</p><p></p><p>The reduced deficit is driven by a large reduction in the volume of wheat being consumed, which more than offsets the cut to production.</p><p></p><p>Production is cut by 475 thousand tonnes, to 9.66 million tonnes in line with the latest Department for Environment, Food and Rural Affairs (Defra) data, published in December.</p><p></p><p>Imports are also seen reduced, taking total availability to 14.20 million tonnes, down <strong>26%</strong> on last year.</p><p></p><p><span style="font-size: 18px"><strong>Tight picture for UK wheat</strong></span></p><p></p><p></p><p>The tight picture for UK wheat this season has driven ex-farm feed wheat prices to a maximum premium over feed barley of £53.50/t, in the week ending January 7.</p><p></p><p>As a result of the increased premium of wheat over other feed grains, there has been a large reduction in the consumption of wheat.</p><p></p><p>Consumption of wheat in animal feed, including integrated poultry units, is seen 711 thousand tonnes lower, at just 5.92 million tonnes.</p><p></p><p>The total reduction in demand is 814 thousand tonnes, leaving wheat consumption in 2020/21 at just 12.62 million tonnes.</p><p></p><p><span style="font-size: 18px"><strong>Where has the deficit gone?</strong></span></p><p></p><p></p><p>While the deficit still exists, owing to the volume of exports already carried out, it is significantly reduced.</p><p></p><p>Furthermore, with exports not included in the balance sheet until the third release is published, the balance sheet now shows a surplus.</p><p></p><p>The reduction in the deficit is a sign of market forces acting to clear the deficit in wheat. The discount of other feed grains to wheat appears to have destroyed demand.</p><p></p><p>While wheat consumption is down, total consumption of wheat, barley, maize and oats is just 73 thousand tonnes less than in the November balance sheet, showing the shift from wheat into other grains.</p><p></p><p>Further to this, the loss of some uncertainty in the market has also cleared some of the fog around domestic supply and demand.</p><p></p><p>When the November balance sheet was produced, the UK was contending with a looming Brexit deadline.</p><p></p><p>Old crop feed wheat is now trading below market parity, which further highlights the reduced need to import this season, as a result of rational market forces working to balance the market.</p><p></p><p>The post <a href="https://www.agriland.co.uk/farming-news/latest-cereal-supply-and-demand-report-shows-small-surplus-before-exports/" target="_blank">Latest cereal supply and demand report shows small surplus before exports</a> appeared first on <a href="https://www.agriland.co.uk" target="_blank">Agriland.co.uk</a>.</p><p></p><p><a href="https://www.agriland.co.uk/farming-news/latest-cereal-supply-and-demand-report-shows-small-surplus-before-exports/" target="_blank">Continue reading on the Agriland Website...</a></p></blockquote><p></p>
[QUOTE="Agriland RSS, post: 7432655, member: 105608"] [img]https://s3-eu-west-1.amazonaws.com/files.thefarmingforum.co.uk/images/agrilanduk.JPG[/img] Written by William Kellett The Agriculture and Horticulture Development Board (AHDB) has published its latest Cereal Supply and Demand Estimates report. The estimates are based on data through to December 2020 and industry discussions. The balance sheet shows the deficit from November removed, with a surplus of 73 thousand tonnes before exports are taken into account. Through to December, the UK had exported 116.7 thousand tonnes of wheat; adding this figure into the balance sheet leaves a 43.7 thousand tonnes deficit. The reduced deficit is driven by a large reduction in the volume of wheat being consumed, which more than offsets the cut to production. Production is cut by 475 thousand tonnes, to 9.66 million tonnes in line with the latest Department for Environment, Food and Rural Affairs (Defra) data, published in December. Imports are also seen reduced, taking total availability to 14.20 million tonnes, down [B]26%[/B] on last year. [SIZE=5][B]Tight picture for UK wheat[/B][/SIZE] The tight picture for UK wheat this season has driven ex-farm feed wheat prices to a maximum premium over feed barley of £53.50/t, in the week ending January 7. As a result of the increased premium of wheat over other feed grains, there has been a large reduction in the consumption of wheat. Consumption of wheat in animal feed, including integrated poultry units, is seen 711 thousand tonnes lower, at just 5.92 million tonnes. The total reduction in demand is 814 thousand tonnes, leaving wheat consumption in 2020/21 at just 12.62 million tonnes. [SIZE=5][B]Where has the deficit gone?[/B][/SIZE] While the deficit still exists, owing to the volume of exports already carried out, it is significantly reduced. Furthermore, with exports not included in the balance sheet until the third release is published, the balance sheet now shows a surplus. The reduction in the deficit is a sign of market forces acting to clear the deficit in wheat. The discount of other feed grains to wheat appears to have destroyed demand. While wheat consumption is down, total consumption of wheat, barley, maize and oats is just 73 thousand tonnes less than in the November balance sheet, showing the shift from wheat into other grains. Further to this, the loss of some uncertainty in the market has also cleared some of the fog around domestic supply and demand. When the November balance sheet was produced, the UK was contending with a looming Brexit deadline. Old crop feed wheat is now trading below market parity, which further highlights the reduced need to import this season, as a result of rational market forces working to balance the market. The post [URL='https://www.agriland.co.uk/farming-news/latest-cereal-supply-and-demand-report-shows-small-surplus-before-exports/']Latest cereal supply and demand report shows small surplus before exports[/URL] appeared first on [URL='https://www.agriland.co.uk']Agriland.co.uk[/URL]. [url="https://www.agriland.co.uk/farming-news/latest-cereal-supply-and-demand-report-shows-small-surplus-before-exports/"]Continue reading on the Agriland Website...[/url] [/QUOTE]
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