Wheat markets have dropped over the past week, with milder weather easing concerns about winter kill, and large global stocks weighing on prices.
The US Department of Agriculture's latest report increased 2011-12 world wheat stocks to a record 213.1m tonnes. However, with drought affecting maize production in South America, it cut coarse grain supplies by a further 3.4m tonnes, to 125.4m tonnes – the smallest since 2006-07.
With milder weather across Eastern Europe, exports from the Black Sea area could resume, and Russia had also announced it would not limit exports in April, increasing its export projection to 27m tonnes. Spot wheat prices lost about £3/t in the week to Wednesday, to about £158/t ex-farm.
"New crop prospects remain bearish with an expected global increase in wheat area, now combined with the prospect of the largest US corn plantings since 1944 at close to 95m acres," said Jonathan Lane, trading manager at Gleadell Agriculture.
"In addition, as less negative weather trends bolster supplies, this bodes ill for crop prices in the second half of this season. However, there is a lot of weather still to get through and winter is not over yet."
Oilseed rape values remained well supported, at about £361/t ex-farm.
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