UK Wheat Supply/Demand
Somebody emailed me a copy of the latest HGCA/Defra UK wheat balance sheet the other day. The tables include estimates for 2008/09 for things like feed usage, imports, exports that sort of thing. As well as their best guesses for the current season, they also include the national average for the previous five years.
Got that? The previous five years, ie 2003/04 to 2007/08, NOT including the current marketing year. The reason that is important is that we can say 2008/09 was an exceptional year not just in terms of production but also exports.
Now this got me thinking, I've been banging on here that I'm actually quite bullish on UK new-crop wheat, as you may have noticed. So I thought why not try and project what the balance sheet for 2009/10 is going to look like, using these historical averages and a bit of half decent guesswork?
So that is what I've done. The table is displayed on the right hand side of the page, just below where the futures prices are.
It makes for quite interesting reading. I've made a few assumptions, but nothing too outrageous methinks, let me talk you through it:
The HGCA/Defra say that 2008/09 UK wheat ending stocks will be 2.44 MMT, that's a little higher than "normal" but I guess that we'd all expect that given the size of last year's crop and the price inverse in the marketplace.
So we begin 2009/10 with a carry-in of 2.44 MMT, for production this coming season I'm using my own personal estimate of 14.5 MMT, which co-incidentally is almost exactly the average over the previous five seasons. That seems to be in the middle of most trade estimates I've seen recently which range 14.25-14.75 MMT.
For imports, exports, feed usage, seed and "other" I've run with figures around the five year average, or thereabouts.
For human & industrial consumption I've increased that from 6.88 MMT in 2008/09 to 7.7 MMT in 2009/10 to take into account extra demand from Ensus.
The bottom line is we are left with a domestic surplus of 1.06 MMT at the end of 2009/10, significantly lower (44% lower in fact) than "normal" over the preceding five years.
Note that projected exports for 2009/10 are cut back to average levels, a full 1.5 MMT less than we are expected to export in the current marketing year. The way things are looking we couldn't export 3.7 MMT again next year because we haven't got it.
Suppose this season's crop only comes in at 14 MMT? That leaves us only a half million tonne comfort zone.
When's Vivergo firing up? Not until new crop 2010 I'd guess otherwise there could be some real fireworks. Interesting.
Got that? The previous five years, ie 2003/04 to 2007/08, NOT including the current marketing year. The reason that is important is that we can say 2008/09 was an exceptional year not just in terms of production but also exports.
Now this got me thinking, I've been banging on here that I'm actually quite bullish on UK new-crop wheat, as you may have noticed. So I thought why not try and project what the balance sheet for 2009/10 is going to look like, using these historical averages and a bit of half decent guesswork?
So that is what I've done. The table is displayed on the right hand side of the page, just below where the futures prices are.
It makes for quite interesting reading. I've made a few assumptions, but nothing too outrageous methinks, let me talk you through it:
The HGCA/Defra say that 2008/09 UK wheat ending stocks will be 2.44 MMT, that's a little higher than "normal" but I guess that we'd all expect that given the size of last year's crop and the price inverse in the marketplace.
So we begin 2009/10 with a carry-in of 2.44 MMT, for production this coming season I'm using my own personal estimate of 14.5 MMT, which co-incidentally is almost exactly the average over the previous five seasons. That seems to be in the middle of most trade estimates I've seen recently which range 14.25-14.75 MMT.
For imports, exports, feed usage, seed and "other" I've run with figures around the five year average, or thereabouts.
For human & industrial consumption I've increased that from 6.88 MMT in 2008/09 to 7.7 MMT in 2009/10 to take into account extra demand from Ensus.
The bottom line is we are left with a domestic surplus of 1.06 MMT at the end of 2009/10, significantly lower (44% lower in fact) than "normal" over the preceding five years.
Note that projected exports for 2009/10 are cut back to average levels, a full 1.5 MMT less than we are expected to export in the current marketing year. The way things are looking we couldn't export 3.7 MMT again next year because we haven't got it.
Suppose this season's crop only comes in at 14 MMT? That leaves us only a half million tonne comfort zone.
When's Vivergo firing up? Not until new crop 2010 I'd guess otherwise there could be some real fireworks. Interesting.