Barley futures volatile as Pound hits DM2.83

By FWi staff

BARLEY futures have seen a volatile week on the back of unsettled Sterling movements.

On Tuesday, the Pound reached a seven-week high against the Deutchmark at DM2.83 and LIFFE futures witnessed falling values to maintain the discount against continental prices, noted the Home-Grown Cereals Authority.

Sterling fell back again on Wednesday to DM2.81, but soon recovered to DM2.83 and prices came under pressure once again.

Thursday saw barley futures rise during a day of brisk trading, but fell back to close 10-30p higher on the day, yesterday (Thursday).

However, little action has actually been seen on the futures market and a mere 50 lots have been traded over the past week, said Rupert Somerscield of the HGCA.

With little feed barley coming forward for spot movement prices have remain firm, said Mr Somerscield of the HGCA. “It is possible to get £83/tonne delivered anywhere in the country. Nothings been traded for 2-3 weeks,” he said.

Exports are non-existent, and with producers not selling theres still a large amount on farm. Buyers are only covering their short term needs, said Mr Somerscield. “And they wont buy more until the price drops £2/t. But farmers will not sell until the price rises by about £2/t. Both buyers and sellers are becoming entrenched.”

Theres more money to be made in selling on the open market before Christmas, he said. “But come January the negative monetary gap could put between 10p and £1 on intervention barley.”