NEW CROP feed wheat prices have slipped below £60/t ex-farm.
It is a new low for the 2004 crop, and the first time for 16 months that values have fallen to this level.
A good quality UK crop is now crucial to underpin export values and provide market support.
Grain off the combine is quoted at £58-60/t ex-farm, and November wheat is worth about £61-64/t.
James Maw of Glencore Grain said: “Prices have fallen by up to £4/t recently as sales from farms have increased slightly.
“As harvest approaches, we expect to see greater quantities being sold. This means we have to look to the export market to find homes.”
A poor quality harvest would produce an abundance of feed-grade wheat which would have to compete with cheap Black Sea supplies and US corn, he added.
Prices would have to slip to £55-58/t ex-farm for harvest to find a sale.
But a good quality year would add much needed support, helped by a US wheat harvest dogged by rain. It is only halfway through and quality is disappearing fast, said Mr Maw.
“As a result, we may find that quality here is crucial.”
A quality crop would compete against French supplies, and, if Black Sea exporters have a good year too, much of their crop may be switched away from the EU to the Middle and Far East, freeing up traditional UK export markets in the Mediterranean.
To remain competitive with the French, harvest feed wheat would be worth about £61.50-63.50/t and about £3/t more for November.
Soft milling and Group 2 wheats would be worth about £3-5/t more, respectively.
“With a gulf between these ex-farm prices and the level at which we could actually export feed wheat today, there has seldom been a time when quality has been more important,” said Mr Maw.