Firmer wheat prices as volumes pick up
Feed wheat prices firmed on Monday after a quiet close last week.
By midday Monday, London November 2010 feed wheat futures had reached £155/t delivered, which is £3/t above Friday’s close while November 2011 was £130/t. Volumes of both months were well up on those of last week.
Prices from now on depend very much on the quality of crops still to be harvested. “If the UK has sufficient quality wheat we look undervalued. If there is more feed wheat we will face competition from other Northern European origins,” says Openfield in its market report.
Both UK and French grain exports have got off to a flying start. Most recently Frontier began loading a 60,000t vessel with feed wheat in Southampton this morning (31 Aug), which is expected to take up to two weeks.
There is generally good demand and variable but firm premiums for milling wheat, much of this bolstered by export business. The impact of floods on Pakistan’s wheat crop is put officially at around 0.5m tonnes but the trade suspects the crop loss could be higher.
The August International Grains Council report last Thursday cut 7m tonnes from the world supply since the July report but points out that this will still be the third largest crop on record. IGC reckons consumption will increase by 2m tonnes to a record 657 m tonnes while year end stocks will drop by 8m tonnes to 184m tonnes.
Looking ahead, Russian autumn plantings may be down by 25 to 35% but those drilling wheat have until late October to get crops in.