Confidence grows in new-crop wheat

By FWi staff

CONFIDENCE of a continued price recovery in the new-crop wheat market is growing, in light of decreasing world stocks, reports Banks Agriculture.

Stocks are forecast to fall to about 95m tonnes next season, from about 110m tonnes at the end of this season.

“With the overall trend in decreasing world stocks we expect no change in the bullish wheat market sentiment,” says Banks in its weekly report.

Glencore Grain agrees that the feeling on new-crop is one of a positive nature.

“The two biggest factors on farmers minds are the state of the crop in the ground and the area not planted to winter crops.”

The planted winter wheat area is estimated to be about 20% lower than last season, according to Glencore.

“The current dry period will allow more to go in, although it is more likely to be spring varieties.

“However, this will go some way to reducing the obvious massive reduction in wheat for harvest 2001.”

Wheat for March is worth 68-70/t depending on location. July wheat is worth 72-74/t.

“Certainly the downside to the market looks limited, but locking into some at over 70/t cannot be totally ignored when four months ago it was fetching 60/t,” says Glencore.