Wheat futures stabilised towards the end of the week after several days of price pressure in reaction to profit taking, much of this by investors who had built up futures positions.
Late afternoon on Friday (1 October) saw London November feed wheat futures at £153.50/t to £155/t delivered as some compounders came back into the market.
The weaker pound against the euro also improved our competitive position and helped values to recover.
Earlier in the week, a strengthening euro against the US dollar made EU prices look less competitive and this added to pressure. News from the USA of higher than expected corn stocks and harvest reports from other countries also played a big part.
Despite potentially severe crop problems in Western Australia, other areas of the country are doing well and the latest estimate for wheat production is 23 to 25m tonnes, compared with 21m tonnes last year. All but 7m tonnes of the Australian harvest should be available for export.
The UK wheat crop is put at 14.8m tonnes by the NFU’s latest harvest survey – slightly down on the five-year average of 14.9m tonnes. In this season of harvest estimates, a nervous market is likely to react to the HGCA crop figure due to be announced on Tuesday (5 October).