By FWi staff

UK wheat values have continued their downward tumble this week, and prices have now lost £5/t since the start of the year.

The question is, “how much worse can it get?” said one trader.

And the answer is that it depends on the variety, said Mark Buckingham of Banks Agriculture.

“There is almost nothing that can help standard feed wheat prices; the French market is on the skids just ahead of ours,” he said.

One possibility of a secure alternative market is intervention. This would provide a floor in the market for some wheat, but only if used, said Mr Buckingham.

However, the free-market price would need to be £2 below intervention for producers to think about it, he said.

Mr Buckingham blames a lack of European policy behind some of the recent price slumps, and for the past two weeks the Commission has failed to come up with a sensible quantity of export restitutions.

“French growers have rightly called for a return to the positive approach of last October and November, and without it there is more than enough wheat in the USA to fill world export demand,” said Mr Buckingham.

But, the Commission is likely to hold back on issuing more export restitutions until those made last year have been used, he said.

With the large volume of wheat still left on-farm in the UK, the outlook for any major short-term rally is becoming increasingly bleak, said Ian Wallis of Cargill plc.

“And it is likely that, for either cashflow or storage reasons, a significant proportion of this grain will be offered to the market in the next few months,” he said.