Floods boost grain futures prices

By FWi staff

ALTHOUGH the floods seem to have had little impact on spot physical UK cereal prices, lower wheat plantings have pushed up futures.

Early implications for lower wheat plantings as a result of the rain have pushed November 2001 futures up 2 to 70/t, reports the Home-Grown Cereals Authority.

But most traders suggest that currency movements are more of a price influence.

The weakening of Sterling against the Euro to 60.5p prompted old crop November 2000 wheat futures to rise 80p to 61.80/t.

Banks Agriculture reports that the sale of feed and soft wheat has still not gathered pace to put the UK on target to remove the export surplus by the end of the campaign.

“Exports are slow and farmer selling is thin at the present prices, although 60/t for feed or soft wheat moving into the next month or two has drawn out increased volumes,” says the report.

Banks estimate of wheat plantings is put at 60-70% of last years level with the proportion of non-bread wheat varieties drilled up on last year.

The premium for group 1 and 2 bread wheats is up 20%, and there is a predicted 5% drop in yields on a smaller total wheat crop, on top of a strong demand from domestic and export markets.

As a result, Banks advises growers to plant breadmaking varieties if they have any chance to drill more winter wheats.

Glencore Grain reports that, while there is still plenty of time to drill winter wheat, “ground conditions are forcing more acres into spring crops.

“As a result, spring seed is in demand for beans, spring wheat and barley, which is likely to cause prices to rise”.

Rapeseed prices have risen this week, up 2-3/t due to a shorter supply in the market and currency making imported rapeseed more expensive.

Feed barley is also up 3-4 this month, as large-vessel third-country buying has returned to the market, reports Banks Agriculture.

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