Sell before wheat price drops further

By FWi staff

FARMERS are being urged to sell wheat now for fear that prices will continue to fall further before they stabilise.

Domestic buyers anticipate a large quantity of wheat will eventually be forced on to the market, depressing prices accordingly, claims Banks Agriculture.

“And with a strengthening Sterling and fierce competition from other EU wheat exporting countries, wheat futures hit contract lows last Friday (29 September),” said Banks Richard Whitlock.

“We have been trying to sell boatloads out of all regions of the UK, but with limited success as September ships have not arrived and the buyers are backing away, waiting for lower prices.

“But it could have been worse – the crop could have only been feed quality which would have meant us having to compete on the world market.”

This season the EU is having to export a much larger crop to third countries than in 1999, and every tonne that is exported needs a license, whether it has a subsidy or not.

Brussels has been sluggish at issuing export licenses so far this season and total licenses to date are running at half the level of last year, reports Banks Agriculture.

“The Commission thinks it is being good by not going over the WTO target, but at the moment we are not exporting enough to keep on the target line,” adds Mr. Whitlock.

“We need help from the Commission otherwise the market will go into free-fall and prices will drop even further.

“If we continue along the same trend the wheat market doesnt look very bright.”

Wheat futures have fallen 3.50/t in the last month reaching a contract low of about 60/t for November, ACCS-assured and close to port.

Non-ACCS feed wheat is 55-57/t for November.

See more