Quality boost for wheat prices
BETTER than expected quality in the UK and, particularly, in France have given a small boost to wheat prices.
At home, early cuts of Soissons have tested well, according to shipper/merchant Cargill, with specific weights around 76kg/hl, Hagbergs over 250 and proteins at 11.2- 11.3%. Yields have also been reasonable.
But it is the realisation in France that most of the wheat crop should now make intervention standard that has provided the real fillip to the market. "Ten days ago wheat was trading 6FFr/kg (£6/t) below intervention due to quality concerns," says Soufflet head of wheat, Mark Treadway. "But that was exaggerated and the market has now moved up closer to intervention."
The award of fairly generous export licences by Brussels last week and some spot demand from shippers also helped the market. Early export business has also eased the pressure on French storage following a 38m tonne harvest.
Some of this improvement has rubbed off on UK prices, with wheat now quoted at £65/t ex-farm for August, £2-£3 up on last week. Some further easing in the value of sterling this week, following clearer indications from the Bank of England that interest rates have now peaked, have also helped.
Lack of farmer selling is another factor, says Julian Walker of Shropshire Grain. "If farmers are selling anything at the moment it is oilseed rape or milling wheat – something on which they can earn a premium. They are sitting firmly on their intervention barley and feed wheat."
But traders warn that the UK market is still fundamentally weak with a big export surplus anticipated and few world buyers. *
Against the grain…cutting wheat was a slower job than usual, due to the stiff stems at Little Briggens, Stanstead Abbots, Herts, says Scott Findlay.