Slight recovery for wheat as Dollar rises


By FWi staff


UK grain values attempted a slight recovery last week on the back of fresh exports from the EU and a fall in Sterling of 1.5% against the Dollar.


Some consumers came in to cover March requirements, and ongoing activity to the ports also helped push the market up, said one trader.


By the end of the week, domestic feed values had moved up about £2/t, with feed wheat ex-farm spot prices at about £71/t and bread wheat at just under £85/t.


Futures responded to this increase, inching up 50p for March futures at£72/t and 25p for May deliveries to £74.25/t.


The EU appears to be maintaining its recent aggressive attitude towards export licenses. Last month saw almost 900,000 tonnes of export licenses granted at very competitive levels.


This was continued on Thursday when the EU grains management granted 325,000 tonnes at a maximum rebate of Euro38/t.


Market confidence was boosted by a sale to Egypt of 120,000 tonnes of French wheat at a price of $87.50/t (£55/t), said Ian Wallis of Cargills. A series of smaller sales to Morocco, Tunisia and the Philippines added to optimism, he said.


But EU grain prices fell on Monday after they lost the Egyptian wheat purchase to the US and Australia. And with Egypts needs largely met, further purchases seem unlikely, noted the Home-Grown Cereals Authority.


Sterling has also recovered this week to US$1.61, but should remain at this level or similar for a while, said Rupert Somerscales of the HGCA.


However, the stronger Pound and weaker French cereal market have not so far transferred to UK values. At present the UK market has ignored the French and currency issues.


“Its all to do with farmer selling, and if theres no supply, prices will be maintained,” said Mr Somerscales.

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