Cereal markets ease as exports are covered

By FWi Staff

UK cereal markets fell by £1 to £2 /t last week. Most of the large export vessels recently loaded are now covered, while domestic users continued to show little interest in buying anything but their immediate needs.

Milling wheat prices are about £86.78/t, while feed wheat prices are £68.90/t. Futures prices have fallen £1.75/t over the week to £72.50 for November delivery.

“There is very slow interest in the market,” said Trevor Harriman of Dalgety, Newmarket. “Exports have taken place, but there is no new business at present. Producers continue to hold their grain in the hope of higher prices, but the market has not been pushed up due to the export commitments.”

UK export wheat is cheaper than both Danish and French supplies at present, although price fluctuations over the past week have meant no one origin has been consistently cheapest. German wheat is also competing with UK and Danish feed wheat this season, as some crops in the north have been of a lower quality than usual.

The Home-Grown Cereals Authority announced that penalties were removed last week on export licences, which had previously made exports for forward months from the EU uncompetitive. This resulted in a bid for over one million tonnes of export licence at last Thursdays meeting. The Commission granted 350,000 tonnes of licence, at a total cost of nearly £8.5 million.

The EU Commission sold 125,000 tonnes of barley for export from UK intervention stores last week, at about £32/t. The Home-Grown Cereals Authority predicts that some will almost certainly be destined for Saudi Arabia, where private buyers are thought to have bought up to 250,000 tonnes in recent weeks.

See more