CEREAL GROWERS should consider selling more of this harvest’s wheat forward, a leading grain trader has warned.
An ex-farm price of £70/t was still available for early spring 2006 in most areas but few farmers were locking in, said Gleadell managing director David Sheppard.
“The number of farmers selling forward is the least I have known in fifteen years,” he added.
“The 2003 drought, when prices topped £100/t, is still fresh in their minds. But that was all over Western Europe – this year it’s confined to Spain and Portugal.”
The EU is set to produce over 261m tonnes, which, together with 17m tonnes of intervention stocks, would produce an exportable surplus of 22.5m tonnes.
Early forecasts suggest the UK would have to ship 2.5-3.2m tonnes.
Unlike other years, UK wheat was at a premium to French grain, costing €4/t more into the Mediterranean.
Eastern European countries were poised to take a bigger share of the market, particularly Hungary with its bulging intervention stores, he said.
Romania and the Ukraine were also expected to increase output, keeping a lid on the market.
But imports from these areas were subject to import restrictions so northern European wheat values would not have to fall to compete, said Mr Wilke.