Early indications suggest that the US will be looking at a “slightly smaller” wheat crop this coming harvest with knock-on effects for the UK.
Changing weather conditions have prompted “early concerns” over the crop this year, though a clear picture cannot yet be put together.
Helen Plant, senior analyst – cereals and oilseeds at the Agriculture & Horticulture Development Board (AHDB), said: “There is not too much we can say from a UK perspective yet, but in the last couple of weeks we have had the first indications of the global picture from a crop and demand point of view. After two large crops across all grains in 2013 and 2014, we are looking at a slightly smaller crop in 2015.
"The more important point is that if the current forecasts follow, wheat and maize would be quite finely balanced across demand levels.”
Plant said the UK was not completely sensitive as we have a “cushion” following large stocks from the last two years, but a lot still depends on the 2015 harvest. Weather conditions in the US have changed, with key growing areas having seen a lot of rain lately whereas winter was quite dry.
“People are trying to work out what it means,” said Plant. “Where we are getting close to harvest in some southern states the rain is raising questions about wheat quality and it could lose some yield, potentially.”
The risks for states including Texas and Oklahoma are greater because they are further south and the crops are further along. They are one of the big producers of high-quality wheat along with Canada and Europe.
“It is about whether quality is affected,” said Plant. “It depends how bad it is, but we could start to see more distance between quality wheat markets and seed grain prices. US prices have risen on the back of these weather concerns and that means the whole wheat market has gained a bit of ground – but it changes on a daily basis.”
Plant said there were no major weather concerns, but that it was a case of looking at the overall picture and that there should be a clearer idea of the 2015 harvest in July.