6 December 1996

Volatile markets

THE currency yo-yo continues with last weeks gains in sterling more or less offset by a sharp downturn in the first half of this week.

Wheat prices matched these movements, slipping on Monday to £88/t ex-farm, but recovering slightly on Wednesday, to £90/t.

The volatility in currency markets has left the trade paralysed, according to Kit Henson of Lincs merchant Gleadells, though a few farmers have taken the chance to sell. But with the economic outlook still buoyant for the UK, the expectation is that sterling is more likely to strengthen than weaken in the coming weeks, adding to the bearish outlook.

Richard Whitlock of Banks Agriculture also believes the current blip is a "sell opportunity". He recommends producers with good enough quality barley should be actively looking at intervention, before a green £ revaluation, expected next month, takes another £3 off the support price.