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GETTING THE BEST OUT OF WHEAT
Wheat Markets Ensuring consistent quality in a volatile world.
Julius Deane
What drivers affect wheat markets?
• Supply & Demand
• Quality
• Foreign Exchange
• Logistics
• Politics
UK Wheat
Milling Premiums
Wheat Production 2015 & 2016
Canada –
30.5MMT
USA -
63MMT
Black Sea –
131MMT
Russia - 71MMT
Ukraine - 26MMT
Kazakhstan -
14.5MMT
Australia -
30MMT
Argentina –
14.5MMT
EU-27 -
145MMT
Canada –
29MMT
USA -
55MMT
Black Sea –
112MMT
Russia - 59MMT
Ukraine –
24.5MMT
Kazakhstan -
13MMT
Australia –
24MMT
Argentina –
14MMT
EU-27 -
156MMT
2015 2016
Wheat Quality 2016
Adverse weather is affecting
quality, lower proteins
Relatively good, lower
specific weights
Exceptional yields but mixed protein
and specific weights, case of quantity
over quality
Bumper crop forecast but
excessive rain is affecting
quality
Argentina – 14MMT
Massive variation across
Europe, losses in France and
Germany made up in Eastern
Europe
UK Quality – National picture
UK Quality – our Mill data
Wheat Type 2015 2016 2015 2016
Protein Specific Weight
Group 1 13% 13.2 13.5 78.2 76.2
Group 1/2 12% 12.3 12.6 77.6 76.7
Soft Biscuit 11.2 11.3 74.8 74.0
Hard Biscuit 11.6 11.6 77.2 74.6
Canadian 15.6 16.2 81.1 80.1
German E 13.8 14.3 80.0 79.0
French 11.1 11.4 78.9 77.5
UK Quality cont.
Nabim Variety Working Party
Zero Waste from a Flour Mill…
Canadian Quality
• Exports significant tonnage of high protein milling wheat annually
• Produces around 27MMT, considerable variation (20MMT – 38MMT) in recent years
• Pre-harvest reports suggested yield and quality would be good
• Reality - weather has slowed harvest and considerably damaged quality
Foreign Exchange – over the last 12 months
FX / wheat price
LIFFE in € - last 12 months
Long Term FX
£ vs. €since 1999 £ vs. $since 1992
GETTING THE BEST OUT OF WHEAT
Brexit implications on wheat & flour
• Weak currency – prices up for wheat & energy
• Export restrictions on wheat and flour?
• Ireland/France/Holland
• Import duties on wheat & flour?
• Staff
UK Supply and Demand
World S&D over last 5 years and forecast
Per MMT 11/12 12/13 13/14 14/15 15/16 16/17
Opening Stocks 199 197 177 194 216 241
Production 697 658 715 728 735 745
Supply Total 896 855 892 922 951 986
Exports/Imports 158 137 166 164 172 173
Food & Seed 550 542 572 574 574 589
Feed & Residual 146 137 172 132 136 148
Use Total 697 679 699 706 710 737
Ending Stocks 199 176 194 216 241 249
Short term LIFFE
3 Month LIFFE
Long term LIFFE
3 Year LIFFE
Long term LIFFE
15 Year LIFFE
Cautions ahead
•EU Maize crop not all in yet
•Dry start to planting season across EU (England Sept 82% LTA)
•Have “plenty” of wheat quantity, but restrictions on quality this season
•Oil market well off bottom
•Currency?
•Markets………