By Robert Harris
CHEAP wheat imports are likely to cap UK prices for some months to come, say some traders, but tight domestic supplies and a lack of farmer selling will keep a firm base in the market.
While cheap imports from Denmark and the Black Sea may limit domestic price rises, at least the small UK crop – which most traders believe will end up at 11.5-12.5m tonnes – should minimise any downside, says Richard Whitlock of Banks Cargill.
This suggests wheat values will stay in a tight band at least until the New Year. The best move is to sell into the rises, he believes.
Gerald Mason, chief economist at the HGCA, says: People are only beginning to grasp that just because we have a small harvest, the UK is not isolated from outside influences.
Currency remains critical this season, says Mr Mason. Sterling losing ground against the Euro raises import prices much like it would have allowed export prices to rise in a normal year.