15 May 1998

Value of new crop grain is up as £ falls

NEW crop grain prices have risen about £4/t in the past few weeks, mirroring sterlings 20 pfennig fall against the DM.

"There is little buying interest, and very little farm grain coming forward. The market is mainly being driven by sterling," says Cargills Simon Lock.

Those with grain to move at harvest could gain by selling now, notes Gary Sharkey of BDR Agriculture. Prices have edged up to £70/t ex-farm for harvest, £6/t less than November. But that discount could soon be £10/t.

"Compounders have bought about 25% cover up to Christmas, intervention stores are full of barley, there is less grain sold forward, and there is little shipping interest. There is also the potential for a 10% bigger crop."

New crop milling wheat premiums are £5/t over feed for Group 2 wheats. Mr Sharkey reckons that could rise to £10-£15/t once millers come to the market.

Oilseed rape new crop prices have dipped from the recent £160/t high, but values of mid to high £150s for early positions still offer a reasonable return for farmers, says Cargills Ian Wallis.

Growers yet to sell should book a quarter to a third of their tonnage, advises BDRs Peter Daubney. "Harvest pressure could soon come to bear, there is a big crop out there." Planting estimates are 8% above last years levels, which produced a record 1.5m tonnes.

Hold on to barley, says Mr Sharkey. "November intervention prices are £9/t above harvest values, it could be a real market."

A big crop is one factor which could see grain prices fall back.