26 April 1996

Poor forecast helps lift grain

PESSIMISTIC predictions of the US harvest have contributed to a rising grain market.

Further increases in futures prices have been seen this week in Chicago, following USDA figures showing 45% of the winter wheat crop to be "poor to very poor".

Against this background, European markets have continued moving upwards, as doubts over the world harvest, combined with low stock levels, fuel the bullish mood.

January wheat futures were trading at under £112/t in early March in London, points out Richard Whitlock of Sidney C Banks. But their value had risen to over £124/t by the mid-week.

"Farmers should take advantage of the current market by locking-in a price. But it may be worth taking an option to ensure the benefits of any further increases are not lost," he says.

Peter Williams of Glencore Grain agrees the firm new-crop wheat values have prompted many farmers to sell over the last two weeks. "It has been like a mini-harvest." Quoting August and September wheat prices of about £115 to £116/t, he says the campaign is starting at much higher prices than last year.

But, though recent days have been busy, farmers have sold far less pre-harvest than this time last year, says David Balderson of Viking Cereals. &#42