New-crop grain markets are nervous, with London November feed wheat futures up £1.95/t yesterday (17 June) to £156.70/t and down to £155/t this morning.
Ex-farm prices are simply following futures up and down, said Glencore Grain trader Tom Eaton.
“Over the past six weeks, we have had an £18/t range and we are near the high end of that, even with the market down today,” he said.
“It’s all on sentiment and it’s very difficult to find any real problem with wheat in Europe, the Black Sea region or Ukraine.”
New-crop feed wheat prices at lunchtime today (18 June) were £140-£150/t ex-farm, depending on region, with November about £5/t above this range.
Continued concern about the US maize crop is fuelling upward pressure, alongside a slow start to the US winter wheat harvest and poor weather in France and the UK.
The US wheat harvest has got off to its slowest start since 1997, with more rain forecast this week. Meanwhile, maize and soya bean planting rates remain behind average, supporting those markets and taking US corn futures to a five-year high.
The continued weakening of sterling, closing below £1=€1.12 for the first time since 11 January, also supported prices, said the AHDB.
Balanced against that are increased wheat crop forecasts for Russia and Ukraine this week, to a combined total of 108m tonnes – just 4m tonnes off the 2017 record (US Department of Agriculture estimate). This could be tempered by dry weather in the spring wheat areas of these countries.
Despite the weather issues, there remains a long-term sentiment of a well-supplied market, with large wheat crops expected in the EU and the Black Sea, said the AHDB.
It also warned that should the price of crude oil spike following increasing tensions in the Middle East, this could provide further upward pressure for global agricultural commodities.