Interest rate rumours weaken Pound, boost wheat futures

By FWi Staff

WHEAT futures prices have risen by 60-70p/t today (Thursday) on the back of a fall in the value of the Pound against the Deutschmark.

The drop in the value of the Pound, falling 1 pfennig to DM2.8136 today, is the result of speculation that UK interest rates might come down next week, following the drop in US interest rates last week, said Mark Buckingham of Banks Agriculture.

This reduction in the value of Sterling has made exports more attractive, and the announcement by the Bangladeshi authorities that they wish to purchase 100,000 tonnes is an exciting prospect for UK exporters with the quality of harvest this seen season.

A devaluation of the Green Pound was not triggered yesterday, the last day of the current reference period. A new period was launched today with a definite chance of a devaluation next week, said Mr Buckingham.

“However, anything could happen to currency over the next week. The devaluation was only just missed last time”

Milling wheat is about £87.35/t for spot prices and feed wheat at £70.38/t. LIFFE wheat futures have inched up to £73.90/t for November delivery.