Rank Hovis News

24 August, 2009
Rank Hovis Harvest Update 2009

Overview

This is the first in a series of harvest updates designed to provide an up to date picture of the UK harvest as it progresses. It will also capture important wheat news from Europe and beyond.

World Picture

Wheat prices on futures markets in Chicago and Minneapolis fell by £13 per tonne over the last month as a consequence of improved supply and demand. This fall has been based on a world wheat crop of 660 million tonnes of which globally there is 150 million tonnes still to be harvested. Of main interest is the Canadian crop where late plantings due to bad weather, combined with lower than average temperatures, have led to some quality concerns. Canadian wheat availability should not be impacted although premiums could increase on higher quality grades.

EU

Following uncertainly throughout the growing season, France has seen above average oilseed rape, barley and wheat yields which has seen wheat forecasts lifted by 2 million tonnes to circa 38 million tonnes. A similar pattern has emerged in Germany with forecasts also rising by 2 million tonnes to circa 26 million tonnes. Variable wheat quality is a pattern emerging throughout most mainland European countries.

UK

Concern that the rains of late July and early August would impact on wheat quality as in 2008 eased as the harvest began in earnest. UK plantings from last Autumn were down 10% and this, combined with increased biofuel demand, has led to the UK’s lowest exportable surplus in recent years (see chart below).

UK wheat production and exportable surplus (million tonnes)

UK wheat production and exportable surplus

How competitive UK wheat prices will be in Global export markets will have an influence on UK domestic wheat prices. More recently UK wheat prices have reflected global sentiment and have drifted slightly lower in the face of weakening demand.

Overview of UK wheat harvest to date

2009 National Summary
Full spec group 1	23%
Full spec group 2	16%

	Est. 2009 % Cut	% of 2008 Harvest meeting full spec
		Grp 1	Grp 2
National	60%	6%	3%

Scotland	<5%	3%	3%
North	<10%	1%	1%
Yorkshire	40%	2%	1%
East Midlands	60%	4%	4%
Wales/West Midlands	30%	2%	1%
East	65%	9%	3%
South East	65%	6%	5%
South West	65%	1%	0%

2009 UK Wheat Harvest Quality Summary

With around 60% of the UK wheat crop harvested, a more variable picture is emerging when compared with the 2008 crop. Although a higher percentage of the 2009 crop is meeting the criteria required of full milling specifications for nabim Group 1 & 2 wheat's, there are wide geographical variations and results in some areas are below 5 year averages (see 2009 National Summary above)

Based on a limited number of wheat samples, the baking quality of nabim Group 1 & 2 appears good. The one concern is around water absorption, which appears lower than last year. This will require a greater focus on wheat selection across harvest to deliver flour performance and final product consistency to ensure that baking performance is maintained.