Wheat Prices Stable Despite Global Supply Chain Disruptions
The global wheat market remains volatile due to ongoing supply chain disruptions and political tensions in the Middle East. Despite these challenges, prices for ex-farm feed wheat have remained stable at around £187/t, with milling premiums narrowing from an average of £16.50 to just under £11/t.
The European Union has downgraded its total grain production forecast by 8%, citing drought conditions that have affected EU maize production and reduced the expected yield to 51.9m tonnes. This reduction in supply is further exacerbated by the disruption of Black Sea exports, with Russian exports in July totaling just 1.9m tonnes compared to a more typical 4m tonnes.
Farm trader Harry Randell notes that 'the world is not buying less grain, it simply cannot access it because the supply chain has been comprehensively disrupted.' When the disruption eases, demand will meet a production base significantly reduced by drought and export disruptions.