Wheat prices have reached their lowest point for a year, falling by about £25/t over the past four weeks, putting the spot feed wheat price at around £140/t ex-farm. London November feed wheat futures opened at £148/t this morning.
Grain markets are under severe pressure on fears of lower demand on a poor world economic outlook and higher harvests than had been expected. However, prices have now dipped low enough to create some buying interest.
The Russian Grain Union is forecasting a 93m-tonne grain harvest and 25m tonnes of exports while other Black Sea countries are also reporting heavy crops.
The pressure was added to last week by higher than expected maize and wheat stock figures from the US Department of Agriculture. The end of the third quarter of the year was likely to lead to funds selling off commodity futures, adding pressure in the US, said HGCA.
The 2012 world wheat area is expected to rise and the recent price falls have taken the ex-farm price for August 2012 back to lower than £130/t. However, very dry weather in the Ukraine and other Black Sea countries is causing concern for newly drilled crops.