Strong export pace leads UK wheat higher

Grain prices strengthened again on Monday, taking London feed wheat futures to £168.50/t for May, the highest for almost five months.

The gap between old and new crop prices has grown, with November closing at £152.75/t.

Speculation continues over Russia’s export plans for the remainder of the current crop year. Its government has given the impression that it sees the possibility of even higher exports than the anticipated 23-25m tonnes, confounding the market, which had been expecting export limits. However, weather-related logistical difficulties are slowing the pace of exports from the region for the time being.

In contrast, UK wheat exports continue at a strong rate, leading the market for the second season in a row, with cheaper freight helping the job.

For new crop, cold weather in the Black Sea region may result in frost damage to rapeseed and barley while snow cover may protect most crops in Russia. In Ukraine the main concern is the effect of cold on crops which had already suffered a dry autumn. However, it was far too early to call the weather effect for new crop, said HGCA’s Jack Watts.

Dry weather in Brazil and Argentina has led to lower soyabean crop forecasts and a knock-on effect into grains.

The Australian floods are mainly expected to damage soyabean and cotton crops, although they may benefit winter seed-bed preparations for cereal drilling from April.