Grain prices rose through the week as sterling slipped against the euro and US dollar.
This put UK wheat futures at their highest level since the end of November, while French wheat futures were at a six-week high because of concerns about the lack of snow coverage in eastern Europe.
Ex-farm spot feed wheat values on Friday (6 January) averaged almost £135/t and ranged from £130/t-£139/t regionally.
The average premium for full-spec breadmaking wheat was about £9/t, while spot feed barley values averaged £116/t, up just over 50p on the week.
Apart from currency influences, global production and market factors also affected trade sentiment:
- US winter wheat ratings were cut due to cold weather at the same time that the market is under pressure from a large US wheat supply.
- The Australian wheat harvest has been held up by rain in the west and south-east of the country, bringing concerns over crop quality.
- Russian 2016 wheat production is said by the state statistics agency to be 73.3m tonnes – up 18.6% on 2015.
- Ukraine achieved strong cereal exports in 2016 – a record 39m tonnes and 13% higher than in 2015.
- Argentina’s 2016-17 wheat output is forecast to rise 39% this year to 15.7m tonnes – the planted area is 20% higher than in 2015.
Oilseed rape prices also rose this week on steady vegetable oil demand and lower Malaysian palm oil stocks.
Poor snow coverage on eastern and central European crops prompted fears of crop damage, pushing up French oilseed rape futures, while US soya bean futures rose on flooding concerns in Argentina.
Ex-farm January values at an average of £349/t were up £3.50 on the week and ranged from £342/-£352/t across the regions.