Wheat prices up due to tight supply

Wheat prices have jumped by almost £7/t over the past week, buoyed by tight domestic and international supplies.

Ex-farm feed wheat was fetching about £200/t for spot movement as Farmers Weekly went to press – its highest level since mid-July. Milling wheat was pegged at almost £230/t, although physical trade remained extremely tight due to the lack of good-quality wheat available, said traders.

In its latest monthly report, the International Grains Council cut global wheat production by 2m tonnes, to 655m tonnes, with ending stocks down by 3m tonnes to 172m tonnes. It also cut its estimate of maize production by 3m tonnes, to 830m tonnes, with ending stocks shrinking again to 117m tonnes. “Reduced availability and higher prices are expected to ration demand, resulting in the first year-on-year fall in grains consumption since 1998-99,” said the report.

A Ukrainian ban on exports from 15 November had also supported markets, meaning EU wheat would become the main exporter until America took over in the New Year, said Jonathan Lane, trading manager at Gleadell Agriculture. “Prices for the 2013 harvest have also risen as plantings struggle to make progress in the UK, parts of France and Germany and the Baltic States.”

Market report