New wheat harvest scores well above old harvest

Photo: Canva
Photo: Canva

The new wheat harvest is trading well above the price level of the old harvest. That is striking, because the new harvest is usually somewhat cheaper. Especially during the harvest period, where the pressure to sell the grain is highest.

There are often years in which the new harvest is a bit more expensive, but this year the difference is strikingly large. For example, the price from September to December is about € 17.00 per ton higher than wheat delivered in April to June. The price difference is the result of the smaller areas of winter wheat sown last autumn. This means that smaller harvests can be expected. The conclusion from this is that the wheat market will be less plentiful in terms of supply from the new season onwards.

Milling industry not running at 100%

The market is currently amply supplied with stocks from the 2023 harvest. Prices have fallen sharply in recent weeks and that is encouraging buyers to be even more cautious than they already were. They always regret yesterday’s purchase, as it were, because today the grain is even cheaper. Compound feed companies in particular hardly dare to buy in advance, afraid that they will be too expensive compared to the competition.

Less to compound feed sector down

For the time being, the old harvest is more than sufficiently available, so it is worth waiting for lower prices. In addition, sales to the compound feed industry have lost some percentages compared to last year, because less feed is sold in a market with declining animal numbers. The milling industry is also not running at 100%. And this also means that sales are somewhat disappointing in a market where supply already puts pressure on price formation.

John Ramaker Commodities market editor, Boerderij