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Frontrunner - 26th February 2021

The Agriculture and Horticulture Development Board (AHDB) updated estimates for the current season's UK wheat balance sheet this week, highlighting a huge two-million-tonne cut in domestic wheat consumption. Demand in the human and industrial sectors is now seen at 6.438 million tonnes; almost half a million tonnes lower than last season.

This is primarily due to loss of demand for biofuel and starch following the closure of the Roquette plant in Corby in December. Miller demand is also lower as a result of the impact of the coronavirus and subsequent lockdowns.

The biggest drop in wheat use, however, is within the animal feed sector where year-on-year demand will be over 1.5 million tonnes lower. Feed barley has been heavily discounted to wheat by as much as £50/t, resulting in wheat being displaced in the feed ration. Wheat imports are seen doubling on the year to 2.1 million tonnes, but the small 2020 wheat harvest - just 9.658 million tonnes - leaves total supply five million tonnes down on the year. This also results in an exceptionally tight supply situation ahead of the 2021 wheat harvest. Old crop wheat prices look set to continue to reflect import costs.

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