Panic buying of food has put many flour mills around the world into overdrive, pushing up prices and premiums.
In the feed wheat market, the slump in the value of the pound to just €1.065 earlier this week briefly made UK wheat export competitive. However, a recovery to €1.10 took us out of that market by midweek, say traders.
Putting trades together is tricky, not only because of volatility and price competitiveness, but also because there is general unease about making commitments when no-one can be certain of delivering on them, said one exporter.
“It’s the logistics – we can’t guarantee that drivers or port handlers will be available when it comes to moving and loading the grain, or whether there will be further movement restrictions,” he said.
The premium of new-crop prices over old-crop continues to encourage growers to hold grain over into the new season.
Higher prices this week prompted some farmer selling on new-crop feed wheat which, as Farmers Weekly went to press on Wednesday (25 March), was worth £150-£164/t ex-farm at harvest.
Midweek, feed wheat for May was not far behind it and worth between £150/t and £161/t ex-farm, compared with a range of £146/t to £159/t last week.
Feed wheat futures for May were at £161/t, having jumped from £148.95/t over the previous two weeks.
Part of that price rise was fuelled by rumours of a Russian cereals export ban, which turned out to be false, but not before it had encouraged speculators to pile into the wheat market.
This was in contrast to market fears early last week which prompted a coronavirus-related sell-off, pushing prices down on global markets.
Imported feed ingredients have shot up in price for both the near future and the winter months because of the low value of the pound and general uncertainty about the implications of the coronavirus pandemic on supply logistics.
Part of that rise must be attributed to profit- taking, market rumour and fear, suggested a national straights trader. Availability at present is no problem, although with some breweries closing, there had been more new inquiries for brewers’ grains than usual, he said.
He expected supply to settle, but prices to remain volatile.