GRAIN TRADERS have reported good wheat sales to Spain and Portugal after the Christmas lull, with values just above the £60/t mark.
Stiff competition from French and Argentinean maize has been blunted by the weak pound and the strengthening dollar.
Coming weeks will see large vessels filling at major ports around the UK, but grain trader Glencore reports that export orders beyond February are “almost impossible”.
Ex-farm prices on Jan 12 were in the range £60-62/t for feed wheat, with forward values dipping marginally. Feed barley traded at a premium of £3-5/t, with March prices slightly higher.
But milling wheat continues to pour into European intervention stores, as the strong euro puts the export market out of reach.
French traders recently took a disappointing 16% share of a 345,000t tender from Egypt, and are reported to have sold wheat well below market value to Algeria.
As a result, intervention stocks across the EU have reached 10.3m tonnes, with almost a quarter of that from Hungary and the Czech Republic.
UK stores have only accepted 4400t of barley.
Grain traders estimate EU stocks will reach 20-30m tonnes by the end of the season in May, and some are now calling for export refunds to help ship surpluses outside the bloc.
But Banks Cargill‘s Richard Whitlock warned that export refunds would attract mainly low value feed wheat, doing little to prevent offers of milling wheat into intervention storage.
“The worst case scenario is that stocks build up and hang over next year‘s wheat values. It would stifle the opportunity of British farmers to sell their crops at decent rates.”