Wheat prices soared after Russia’s prime minister Vladimir Putin announced a grain export ban following the worst drought in the country for more than 50 years.

Trading on the London futures hit £169/t for November early afternoon on Thursday (5 Aug), up £18 on Wednesday’s close and almost 60% higher than a month ago. May futures leapt to £175/t.

But markets eased slightly on Friday with the NYSE Euronext exchange closing at £152/t on Friday evening.

“Everyone knows that the market is rallying on the back of potential production threats across Europe,” said Openfield’s Mark Worrell. “But every time the embers die down, something else happens to fan the flames again.”

Speculators piled back in to the market on the news that Russia was to implement a ban from 15 August. “It sent shockwaves throughout the market – the French MATIF is about €20 up and Chicago locked out at its daily limit of 60c/bushel.”

Ex-farm wheat is now pegged at £145-150/t depending on location, the highest since April 2008. Farmers should consider selling more grain at these levels, Mr Worrell said.

“Prices are now well above what growers will have hoped for and budgeted for. Many will have sold some tonnage forward and this represents an opportunity to improve the overall average.

“That doesn’t mean to say the rally is at an end. But no-one knows when that point will come. I don’t think the market will develop a structure until October, but there is so much speculator money involved – at what point will they pull out of the market?”

• What’s your view on the grain prices? Have your say on our forum or for Farmers Weekly’s opinion see Phil Clarke’s Business Blog.

phil