UK prices have slipped on the week, due to higher-than-expected June imports and the early harvest.

The larger import figure has left the UK with a slighter bigger carryout, although it remains at a historical low level. However, inflated volumes of imports are expected to continue through July and early August.

In addition, the early harvest has left the market well supplied, squeezing delivered premiums.

The UK balance sheet now projects a small exportable surplus and the realignment of the market leaves us relatively competitive for coaster business to Ireland.

European markets have also been following the global lead up and down. On Thursday afternoon, values were down €3/t on the week. News that the Ukraine and Russia will still have volumes to export, albeit lower than last season, allowed export prices to drift, the first drop for several weeks.

Russian wheat exports are running ahead of last season and, while that country has the wheat to sell, it will to sell it, and at cheaper levels than other origins.

EU wheat exports remain dire. They are running almost 40% lower year on year at just 1.76mln t for the season to date, while uncertainty still remains over the EU’s final production.

The global market remains in a period of uncertainty. Markets witnessed strong gains at the back end of last week, when reports coming from Russia were interpreted as restricting exports, although these fears were quickly quashed by that country’s agriculture ministry.

The market has been trying to find support from the assumption that export trade will eventually switch to the US, given smaller crops in the EU and Black Sea, and uncertainty over Australian production following intense drought.

However, US wheat sales and shipments are running well behind last season, and with weaker maize prices and another bumper crop on the horizon, traders continue to trade the present and not the future.

Gleadell comment

In summary, we may have seen the top of the market for a while, although world markets in the long term still have supportive factors.

Falling global production and uncertainty about final Southern Hemisphere crops may provide support, but at present the market has turned to the negative side, as bullish factors have waned and bearish sentiment prevails.

In the UK, growers have seen some price protection from a weaker exchange rate, while the increasing chance of a no-deal Brexit next March has provided further support.

With the UK facing an uncertain future regarding Brexit and its currency implications, the wheat market, not only in the UK but globally, remains a difficult one to call over the long term.