Q Grain markets have had a better week as sterling has weakened and first estimates suggest a smaller UK crop than once expected.
At close of play on Wednesday (23 September) the Farmers Weekly price for feed wheat was £89/t, up £4 on the week, while barley was quoted at £74/t up £2.
But these gains could be short-lived, despite the NFU’s somewhat bearish crop estimate of a 12.9m tonne wheat harvest for England. Most traders think this is too low, though many have refrained from issuing their own figures pending the publication of official data in October.
Even if the NFU is right, there is still about 2m tonnes to export and that will have to price itself in. The weakness of sterling is helping, but cannot be relied upon long-term.
Meanwhile, news comes in of ample supplies in Europe. The Polish government this week declared a 7% increase in its grain production to almost 30m tonnes, while Spain says its main port is already full, following heavy shipments of wheat from the Black Sea region.
Perhaps the better news is contained in the recent HGCA quality survey, which puts UK wheat ahead of last year. This has led to a narrowing of the gap between French and UK values.