29 August 1997
Grain prices start to rise
By Philip Clarke
GRAIN markets have shrugged off the recent green pound revaluation, with prices edging higher this week, despite the drop in intervention.
With feed wheat now quoted at £82/t ex-farm for September, values are at a 12-week high and considerably better than the £72/t at the end of July.
Continued slippage in the value of Sterling to DM2.90 and a lack of farmer selling are the two principal reasons for the stronger market, says trader Robert Daniel of SCATS Robertsbridge. This has also helped barley gain about £4 in the past fortnight to £72/t.
But the big question is whether the recent upturn is the start of a long-term recovery, or just a temporary rise into which farmers should now be selling.
Those who argue that grain prices are likely to move higher point to flagging crops around the world, where adverse weather conditions have lowered production forecasts in Canada by 23%, Argentina by 21% and Australia by 32%.
But regardless of world production, its crop quality which will really set the tone for UK growers and there are some genuine concerns about whether crops in the west and north will make the grade.