UK feed wheat futures (Nov-19) lost ground yesterday closing at £146.35/t, down £1.60/t. The 20-day moving average is on the verge of breaking below the 100-day average for the first time since mid-January.

In January the break below the 100 day average kicked off a prolonged move lower.

Whether the move lower is sustained this time will depend on developments in the global grain harvests.

The winter wheat harvest in the US is now 69% complete, compared with 79% this time last year. Meanwhile, the EU commission has lowered yield estimates slightly following last month’s heatwave.

• US winter wheat harvest seen at 69% complete, down 10 percentage points on last season. 
• Ukraine wheat harvest is now 63% complete according to UkrAgroConsult, with yields up 0.39t/ha on last season.

As we move through July and into August progress of global wheat harvests becomes increasingly important to price direction.

US

In the latest US crop report released this week the winter wheat harvest is seen as 69% complete,down 10 percentage points on last season.Conditions in the US had been positive and continue to look favourable for the coming week. As such we could well see continued good progress.

Quality of the Hard Red Winter Wheat crop is also largely positive. The latest report from the US Wheat Associates, highlights above average yields and good bushel weights although protein content is down year-on-year.

Ukraine

Wheat crops in Ukraine continue to look plentiful. The wheat harvest is now 63% complete according to UkrAgroConsult, with yields up 0.39t/ha on last season. Despite good progress in Ukraine crop expectations for the Black Sea region as a whole have been limited by smaller than expected crops in Russia.

UkrAgroConsult comment that while feed prices may be supported by the tighter black sea output, milling wheat competition may be higher.

In a post-Brexit environment the UK could become increasingly dependent on being price competitive against Ukrainian wheat.

EU

The French wheat harvest was reportedly 33% complete in the week ending 15 July. While progress in France is significantly behind last season, crop conditions continue to look favourable. FranceAgriMer estimates rate 73% of the French soft wheat crop as “good” or “very good”.

Elsewhere in the EU, the latest EU Commission crop monitoring report highlighted the impact of the heatwave that hit Europe in late June. While crops were affected by the weather, the impact on yields expectation has been limited. Yields are forecast at average to above average for much of the EU.

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