Harvest puts more pressure on grain
GRAIN markets have come under further pressure this week as new crop harvesting gets under way in the US and southern Europe and sterling strengthens further.
Old crop winter wheat is now worth about £80/t ex-farm – the lowest for 20 years – with farmers selling every day to clear their barns. "There are still long holders, but the chances of the market recovering before harvest are between nil and zero," says Robert Kerr of Glencore Grain.
With sterling at a six-year high against the French franc, new crop prices have also had to fall to stay competitive. This drop has been exacerbated by better-than-expected news on early season wheat in the USA and Spain.
But, according to Andy Bury of Cargill, new crop may now have bottomed out at £88/t for November.
So far very little has been sold forward by farmers. But, if there is no more solid rain in June, then weather market could develop, creating a "sell" opportunity. *