UK wheat prices remain extremely high despite some marginal decline from levels a week earlier.
Ex-farm feed wheat prices collated by Farmers Weekly on 18 March averaged £287/t for March collection, down by £2/t on the previous week. Prices ranged from £280/t in Norfolk and Suffolk to £303/t in Northumberland.
Exceptionally high feed wheat prices are encouraging purchasers to look at alternatives, which is driving demand for feed barley.
Ex-farm feed barley prices ranged from £200/t to £222/t for March collection and averaged £274/t, up by nearly £5 on week-earlier levels.
The gap between feed barley and feed wheat prices has narrowed, with feed barley now at a £14 discount, compared to a £20 discount this time last week.
UK milling wheat has dropped by more than £6/t on the previous week to average £305/t. This puts milling wheat at a premium of £17/t to feed wheat. However, calls from industry advisers and experts suggest a premium of at least £30/t is needed to cover additional input costs from high fertiliser prices.
Grain traders have indicated that markets have tempered slightly from the record highs of last week, but remain volatile and particularly reactive to news concerning Russia and Ukraine.
May 2022 UK feed wheat futures stood at £293/t at midday on Friday (18 March), down £5/t on week-earlier levels.
The ongoing conflict between Russia and Ukraine continues to affect global grain markets. While markets remain fairly volatile, they have shown signs of easing in recent days.
AHDB arable market specialist manager Vikki Campbell said: “The more positive noises coming from Black Sea talks provided a slightly softer tone to markets.
“In addition, Stratégie Grains has raised its forecast for EU-27 wheat exports by 2m tonnes, to 32.5m tonnes, as a result of reductions in shipments coming from the Black Sea.”
Several other market drivers are likely to affect global markets, aside from conflict in the Black Sea region. Industry reports suggest adverse weather could hit spring plantings in China, which is expected to support prices.
Grain trading advisers CRM Agri suggest there is also an encouraging forecast emerging for US winter wheat.
Dry conditions and poor winter wheat crop conditions in the US have been a supportive factor for markets, according to the firm.
Oilseed markets are highly volatile at present, with high crude oil prices supporting markets.
UK ex-farm oilseed rape prices averaged £776.80/t on 18 March, with a range of £755/t in Norfolk and Suffolk to £790/t in Essex for March collection.
Paris rapeseed futures (Matif) opened at €930.75/t (£782.30/t) for May 2022 on 4 March, up by €50.75/t (£42.66/t) on week-earlier levels.
Recent gains in oil markets are being attributed to supply shortage concerns, according to CRM Agri.
Looking forward, CRM Agri said: “With war continuing in Ukraine and building covid cases in China, this level of volatility is likely to persist as both supply and demand for energy and commodities in general are questioned.”