Wheat prices fell sharply on Tuesday (30 June) after a surprise increase in US corn plantings, bringing the total drop to £22/t since mid-June.
The US Department of Agriculture shocked grain traders when it released a report showing that farmers had planted 87m acres of corn, the second largest area since 1946, and well up on trade estimates of less than 84m acres.
British wheat futures dropped by £5/t in reaction to the report, which also said that US wheat stocks in June were 118% above the same time last year. Although London futures recovered slightly on Wednesday, November wheat was worth less than £110/t ex-farm. That was £22/t down on mid-June values, said David Sheppard, managing director at Gleadell Agriculture.
“It’s fallen because we have very large stocks of old crop wheat and barley, both in the UK and around Europe. New crops look well, the pound has strengthened and consumers are not buying.
“We are heading for a bit of a car crash of a harvest, with limited buying demand, large stocks, and big yields in France and the Black Sea.”
With very little British wheat yet sold, exports would have a slow start, added Mr Sheppard. “But once we get out of harvest we might get a bit of a different picture.”