Grain prices recovered in the first half of this week after falling to six-month lows on the back of fund selling.
As Farmers Weekly went to press, the London November 2011 feed wheat futures price had risen by £5.25/t on the day to stand at £169.50/t.
The big fall has been largely attributed to the influence of world economic factors rather than fundamental grain market issues. Funds holding massive positions had bailed out of grain markets in response to a weak US economic outlook, lower oil prices, problems in Greece and pressure on the euro.
Domestic consumers had been buying over the past month or so, but exports of what was looking like a very modest UK surplus may get off to a slow start, said Fengrain’s marketing director Rob Munro.
The extent of Russia’s export offering was still unknown and the market was trying to find some equilibrium, he said.
Price movements in the next couple of weeks will be volatile again as more yield and quality information from Continental Europe starts to filter through – reports so far from France have been too variable to establish an overall trend.
Harvesting in Russia and Ukraine has been delayed by rain, according to French analyst Agritel, while high rainfall in parts of the US corn belt means that a large acreage may not be drilled.
* At a meeting in Paris last week, farm ministers of the influential G20 group of countries failed to make any progress in restricting the impact of speculators in agricultural commodity markets. Any reform of commodity trade regulations will now be up to finance ministers and central bank governors, although many observers doubt that anything meaningful will be agreed.
In a bid to increase production and improve agricultural market transparency, the G20 farm ministers agreed on the introduction of an Agricultural Market Information System initiative to provide improved production, consumption and stock data to be administered through the United Nation’s Food and Agriculture Organisation.