New crop weather market lifts grain prices higher

Futures markets rose again this morning with London feed wheat higher by up to £4/t after a £5 to £6.75/t jump on Monday.

Dry conditions in Europe and cold weather in the US have combined to confirm the weather market for new crop.

This put feed wheat at £165/t off the combine and £170/t ex farm for November, said Gleadell trading manager Jonathan Lane.

“It’s all a weather market. Central France needs rain now and so do certain farms in Kent and the south east,” said Mr Lane. Some crops on lighter soils were losing tillers.

“Heavier soils in the midlands and further north are OK but if we don’t get significant rain by 5 May to 10 May, we’ve got a real problem.”

Cold weather in the northern US is delaying corn plantings, while snow and frosts in Canada are holding up wheat drilling there.

Figures from the German Farm Co-operatives Association added to the pressure. These forecast lower grain and oilseed production for harvest 2011 because of poor planting conditions in autumn, winter-kill and current dry conditions.

Total grain production is forecast at 44.1m tonnes which is 100,000t down on last year’s harvest. However rapeseed production at 5.2m tonnes is set for a bigger fall, down 500,000t on last year’s harvest and 200,000t lower than estimates made in March.