15 March 2002

Wheat values up but planting area rise disappoints

WHEAT plantings have risen by almost half compared with last years level, according to DEFRAs final December UK survey of agriculture figures.

However, the 46% rise over the 2000 level, which was hit by appalling drilling conditions, is less than many had predicted, pegging the area sown (as of Dec 3, 2001) at 1.98m ha (4.89m acres).

That is slightly below December 1999 levels. The latest figure would yield a crop of 16.2m-16.8m tonnes, once spring plantings are taken into account, says Glencore Grain wheat trader James Maw.

This points to an exportable surplus of 4m-4.5m tonnes – about 500,000t lower than most previous estimates.

New crop wheat prices have lifted by £1-1.50/t recently, although this was mainly due to currency fluctuations, says Mr Maw. He adds it is too early to read much into the figures because it is not an official census and the margin for error could be up to 1m tonnes.

Martin Parry, of co-op Centaur Grain, says: "These figures are mildly supportive, but there is still an awful lot of wheat to get rid of in a negative market-place."

Old crop easing

New crop wheat is now worth about £61/t for November, while old crop wheat is easing towards new crop prices at £66/t ex-farm for this month.

At 565,000ha (1.39m acres), winter barley plantings were estimated to be more than 20% higher than last year. This is above original forecasts, but new crop is thin, trading and prices remain at about £61/t for November.

Old crop values continue to weaken amid poor export demand and intervention level French prices. There is not far for UK values to fall, from £56-58/t ex-farm, but grain will need to be good enough quality to be eligible for intervention, says Mr Maw.

Meanwhile, rape values have improved, as the US and China are reported to have reached an agreement on GM imports. Chicago soya futures jumped to five-month highs in reaction, and UK values have followed suit, rising to £140-£142/t ex-farm.

DEFRAs planting survey estimated winter rape plantings at 341,000ha (842,600 acres) – 1% down on last year. This came as a surprise to traders, who expected a 5% increase. &#42