By Robert Harris
WHEAT exports are back on track after revisions this week to the official figures. But prices are likely to remain under pressure.
About 70,000t more wheat was shipped from the UK during January than was thought, taking the total to 265,000t for the month.
February tonnage was slightly higher, bringing the cumulative total since July to 2.4 million tonnes, says Gerald Mason of the Home-Grown Cereals Authority.
“This suggests that exports are on track to reach the ministrys estimate of 3.2m tonnes, contrary to recent trade expectations.”
However, he cautions that some EU exports, particularly to France, are difficult to reconcile, which could mean the tonnage is slightly overstated.
Even if the target is reached, the UK will carry over about 400,000t more wheat than required into the new season, he adds.
This, coupled with reduced animal feed usage (mainly due to the fall in pig numbers) and about 1m tonnes of imports, will largely offset the widely predicted smaller harvest, which is expected to be down by 1-2m tonnes.
“We could end up with a similar export target next year. And the French are forecasting another big crop ó the area is only 1-2% down.”
November wheat is worth about £73-74/t ex-farm.
With domestic supplies still near parity with the French, it seems either Sterling must weaken or the French market must rise to avoid further price pressure, says Robert Kerr of Glencore Grain.
As far as this season is concerned, the past few days has seen a definite change of sentiment in a market which had been driven by domestic demand, he adds.
Spot shorts have largely disappeared. “There are still some to be had, but where there were four, there is now one,” says Mr Kerr.
“The last of the cows have finally been turned out and, with June fast approaching, farmers have sold into this latest rally.”
Ex-farm prices have slipped to £73-74/t. One bright spot is better than expected export figures for April, which Mr Kerr reckons could hit 210,000t.
“Its still not exactly a big month, but if it was repeated in May and June it could still tighten the whole thing up,” he says.
More barley is likely to be cut this harvest, and about 800,000t is forecast to be held in intervention stores by then.