UK wheat prices rise but farmers reluctant to sell
By Tamarind Davidson
UK wheat prices have risen this week, supported by limited farm supplies and high domestic and export demand.
Bread making wheat is up 2.50-3/t at about 74/t, following two weeks of decline, but farmers are still reluctant to sell.
“With premiums at 14/t it is still not enough,” says Robert Kerr of Glencore Grain. “The weather has been very unreliable, so those with milling wheats already in the barn know that it is safe.”
On the continent, the crop has deteriorated further with reports that France is experiencing its worst harvest for 20 years. In Germany poor weather is causing similar problems.
“UK millers usually source their wheat from these countries if UK farmers wont sell. But this is unlikely to happen this year, so many traders are urging farmers to hold on,” adds Mr Kerr.
“But there is a limit, as millers will start to use lower grade wheats. We should start to see some selling when premiums get up to about 15-20/t.”
First reports from the Home Grown Cereals Authority on the quality of the wheat harvest are promising, with Hagbergs substantially improved on 1999.
Although there are too few samples to make any definitive claims, so far 44% of group three samples would meet a full export grade of 74kg/hl, 220 Hagberg and 12% protein.
“With the quality of the wheat crop quite poor in the main exporting countries, this is good news for UK growers,” says Gerald Mason of the HGCA.
“France is unlikely to meet the full demands of Italy, Spain and Portugal, providing opportunities for the UK crop.
“In addition, Poland is looking to import 800,000t this year, due to its poor quality harvest. This would usually come from France, Germany and other eastern European countries, but this year we could secure a large proportion.”
Feed wheat prices have gained 3.50/t over the past fortnight to about 60/t, but weather over the coming weeks is crucial.
“If the rest of the crop only makes feed quality there will be a huge surplus and we will have to compete with France and Germany. This will have a significant impact on prices,” says Mr. Kerr.