By FWi Staff
UK cereal markets have now recovered from last weeks falls, with ex-farm prices climbing about £2/t.
Supplies have been tighter this week as a general reluctance among producers to release stocks put pressure on supplies.
“As farmers IACS cheques start to arrive on-farm, selling by farmers has dried up to a trickle,” noted a spokesman from Gleadell Banks. “This has forced shorts to pay up for spot wheat and consumers who still need to buy are in a similar position.”
UK feed wheat prices climbed as much as £3/t delivered in some areas, and prices averaged at about £74.60/t. Milling wheat remained steady at £91.30 as did other milling wheat at £81.20/t.
The official request from Russia for food aid to America has also helped boost prices, noted a spokeswoman from the Home-Grown Cereals Authority. “Although the request was made directly to the USA, with the Americans poor quality, there is hope that the Russians may take some from Europe.”
A further factor that helped prices over the last week was the publication of the International Grains Council report announcing lower worldwide grain forecasts, particularly in Russia and Australia.
However, UK export markets have become uncompetitive against French wheat following the recent price increases. The export programme started well, and the HGCA believes that as much as 800,000 tonnes could have been shipped up to the end of September.
Sterling moved up slightly during the week to finish nearly 2pfg higher against the Deutschmark than a week before, said Mr Wallis.
“However, much attention is now focused on the outcomes of this weeks meeting of the Bank of England monetary policy committee. Following a reduction of 0.25% last month, interest rates are widely predicted to be cut again.”
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- World coarse grain estimate down 6m tonnes, FWi Markets, yesterday (02 November, 1998)
- IGC forecasts world wheat 7m tonnes down on 97, FWi Markets, yesterday (02 November, 1998)