Further gains for grain prices

Grain prices continued to rise this week, with November futures reaching more than £190/t on Tuesday, bringing the increase over the last four weeks to almost 25%.

Spot feed wheat ranged from £210 to £216/t ex-farm on Wednesday (see Markets and Trends, p154) while as available new crop feed wheat prices were in a £176 to £181/t range with feed barley at a £4/t to £7/t discount to wheat.

Prospects for the Russian cereal harvest were downgraded by its agriculture minister from 85m tonnes to 80m tonnes this week, with drought the main reason for the revision. This would give an export potential of about 16m tonnes. Analyst Agritel is reporting poor barley quality in Ukraine.

US corn (maize) prices for December have jumped by about 50% in Chicago over the past four weeks on concerns about the quality and yield of the crop in a persistent heatwave. US wheat prices for some contracts on the same market have risen 40% over the same period.