Wheat market remains firm
WHEAT markets have remained firm despite the recent Brussels decision to suspend export subsidies for a further six weeks.
Feed wheat was trading in the UK at about £110/t ex-farm this week, and throughout the EU prices are some 15 to 20% above intervention values.
The Brussels decision came as little surprise as the commission is understandably keen to keep as much grain as possible within the EU, to keep a lid on prices and rebuild stocks.
The policy has been partially successful in as much as just 100,000t has been exported to third countries in the past two months compared with the 2 to 3m tonnes that would normally have been done.
According to the Home-Grown Cereals Authority, the world market is getting close to the point where there will be no need for subsidies. Indeed, if EU prices are overtaken by world prices, there could be a tax on exports.
But this is unlikely to be a major concern for UK growers. "While the overall cereal harvest is significantly higher than last year, we do not see any problems in disposing of our exportable surpluses of either wheat or barley," said Dalgety crop marketing manager Andrew Barnard.
Preliminary results from about 500 farms point to an estimated 14m tonne wheat crop (up 700,000t) and a 7m tonne barley crop (up 1.1m tonnes), both of excellent quality.
This would give a wheat export surplus of 2.8m tonnes for wheat and about 1m tonnes for barley. "So long as we have orderly marketing, we can shift this easily," said Mr Barnard. "The Spanish are especially keen on our wheat. But we dont want to lose out by shutting the barn doors now."
With up to 300,000t already exported, with little carry over from last season and with animal feed usage expected to increase, the outlook remains firm.