UK Market: Rising Stocks Keep Wheat Prices Subdued
Posted by Emma on 3rd Feb 2025
The UK wheat market struggles with high stocks and weak export performance, keeping prices under pressure. Despite a smaller harvest, the latest Agricultural and Horticultural Development Board (AHDB) estimates predict wheat exports for the 2024/25 season will reach just 175 Kt—a 32% decline from last year. This marks the lowest recorded export level in over two decades.
Between July and November, wheat exports amounted to just 51.6 Kt, a staggering 62% drop from last year. While export activity may increase in the second half of the season, overall volumes remain significantly lower than usual. Meanwhile, domestic wheat stocks are expected to rise sharply, reaching 2.708 Mt by the season’s end—well above the five-year average of 2.116 Mt.
This growing supply surplus, sluggish demand, and continued wheat imports are keeping the market bearish. Milling wheat premiums have remained stable, with imports preventing significant price increases.
Wheat Price Movements
| Category | 13-Jan Price (£/tonne) | 31-Jan Price (£/tonne) | Change (£) |
|---|---|---|---|
| LIFFE May 25 Futures | 191.20 | 193.50 | +2.30 |
| CWRS (Del Spot) | 296.00 | 293.00 | -3.00 |
| High-Protein Wheat (AMJ 25 HP) | 227.00 | 235.00 | +8.00 |
| Low-Protein Wheat (AMJ 25 LP) | 212.50 | 215.50 | +3.00 |
Outlook for the UK Wheat Market
With wheat stocks expected to remain high and domestic demand showing slight improvement, UK wheat prices are unlikely to see any significant movement soon. Unless export activity picks up significantly in the second half of the season, the market is expected to stay relatively flat.
Global Market: Tariffs Threaten Trade Disruptions
Beyond the UK, the global wheat market has been rattled by fresh tariff concerns from the US. Over the weekend, it was confirmed that Canada and Mexico will face a 25% tariff, while China will see an additional 10% tariff on imported goods.
These tariffs could have significant consequences for global wheat prices. The US is a key grain exporter, and retaliatory tariffs from major buyers like China and the EU could reduce demand for US wheat, leading to a domestic surplus and lower prices in the US market. However, this could increase global wheat prices as countries look for alternative suppliers, such as Brazil, Argentina, and Australia.
Additionally, if tariffs are imposed on agricultural inputs like fertilisers, US farmers could face rising production costs, making wheat more expensive. Countries that depend on US wheat could also see higher prices.
What This Means for Global Wheat Prices
• Short-Term Impact: Markets will likely remain volatile, with traders reacting to policy uncertainty. Futures prices could swing sharply depending on how countries respond.
• Long-Term Impact: If US farmers reduce wheat production due to lower profitability, global supply could tighten, pushing prices up. However, if other wheat-producing nations increase output, the market could stabilise.
For now, wheat prices remain sensitive to trade developments, and any shifts in tariff policies or export flows could create further price volatility.