Grain prices remain under pressure as the signs point to a large 2015 crop.
The market dipped again at the start of this week after losing about £5/t last week. A rise in the value of sterling against the dollar is making UK exports outside the EU more difficult, following a better run of trade.
The UK old crop market continues to suffer from heavy stocks although there remains a large regional variation in prices, with the North East and North West up to £10/t stronger than other regions.
Farmers Weekly’s ex-farm average for spot feed wheat stood at £107/t this week, down about £1/t on last week but showing a regional range of £105-£114/t.
Barley trailed wheat by up to £7/t in Yorkshire, demonstrating the local impact of demand from Vivergo’s bioethanol plant, but in most regions there was just a £1-£2/t gap between wheat and barley.
“There’s no bullish story in the market,” said trader David Elderkin of co-op Fengrain.
“I would be very surprised if there was anything to improve the old crop market.”
Carrying old crop into the new season was just about viable on current prices, he said, but the prospect of a large new crop made this risky.
“There’s no bullish story in the market.”
David Elderkin, Fengrain
Gleadell managing director David Sheppard said that further rain across much of the US had kept prices in check.
New crop international trade would struggle until a firm decision was made by Russia as to whether it would lift its export tax for the new season, he said.
The International Grains Council recently raised its forecast for world grain production next season, with better maize prospects more than outweighing a reduction in forecast wheat output.
IGC forecast world grain production at 1.95bn tonnes, a 53m tonne drop on last year, but still about 3% higher than the five-year average.
The EU’s Mars crop monitoring service released a positive production outlook for the main cereals and oilseeds in Europe, predicting yields for 2015 lower than last year but above the five-year average.