Market report: Cereal prices tumble

Feed wheat prices have slumped by more than £9/t over the past fortnight, with traders blaming stronger currency and beneficial rainfall improving yield prospects.

The Farmers Weekly average ex-farm price dropped from £102.40/t in the week-ended 28 May to £93.60/t this week, with Group 1 milling wheat showing a more marginal £3/t fall to £112.20/t. Feed barley eased by almost £4/t, to £77.80/t.

New crop values have also fallen, with November wheat futures down by £8.50/t in the two weeks to Tuesday (8 June), to £101.75/t.

Gleadell managing director David Sheppard said recent rainfall and adverse currency movements were to blame for the slide. “From its recent lows sterling has recovered by 10% versus the euro, which in round numbers is a £10/t price reduction for UK cereals.

“US corn (maize), soya and wheat crops remain in mainly good to excellent condition and US markets are struggling to move anywhere but lower as a result. The fundamentals of supply and demand remain bearish and we shouldn’t expect a sustained rally unless we see a widespread late crop problem. However, the crop is not yet in the barn and the next six weeks are just as important as the last six weeks.”