By FWi staff
WHEAT prices must rise throughout the coming season if they are to remain stable in real terms, says the Home-Grown Cereals Authority.
Assuming borrowings remain level at 9.25%, mean wheat returns must increase by 50p per month, HGCA analysts have calculated.
If farmers believe prices may recover, then wheat quality, currency fluctuations and supply and demand should be the prime considerations when negotiating a sale, HGCA analysts advise.
A high-quality UK crop could push up the value of UK wheat which is currently £4/ tonne cheaper than French supplies.
Currency movements are more difficult to predict. The adoption of the Euro next January and continuing uncertainty over UK interest rates make forecasting future fluctuations difficult.
But Sterling must weaken by about 5% over the coming nine months just to cover the interest charges on a crop left unsold until next June, say HGCA analysts.
Top quality milling wheat is currently worth £78/ tonne ex-farm. Lower grade milling wheat is worth £72/ tonne and feed wheat is worth £64/ tonne.