Wheat market marks time ahead of the Euro

By FWi staff

THE wheat market was dead last week, with very few sellers and even fewer buyers, according to Banks Agriculture.

“Sellers have only been looking at near positions. However, January/February may not be an easy selling period and, if producers require movement in this period, it may be worth selling pre-Christmas,” a spokesman said.

The lack of interest in the market at present is due to the recently improved values in Sterling, said Robert Kerr of Glencore Grain. Exports had started extremely well, but have declined in recent weeks. So in nearby positions (December/January/February) it looks as though it is Sterling that will trigger any price rises, he said.

“Even if interest rates are cut this week as rumoured in the city the Pound wont fall dramatically. And come January there is a big uncertainty as to what will happen with values.

“No one knows what will happen as the Euro is formed, and it is not known whether it will start strong or weak.”

If producers know what they can achieve for grain now, they should sell some before Christmas, advises Mr Kerr: “Because, come January, no one has a clue what will happen.”

There is plenty of demand at present but, if the UK is not competitive, we wont get it, he warned.

UK wheat prices firmed slightly higher last week and Sterling fell to DM2.77 midweek, but recovered to DM2.79 by Friday, according to the Home-Grown Cereals Authority.

Milling wheat had crept up to £92.80/t by the end of the week, while feed wheat also inched up £76.9/t for ex-farm spot prices.

Futures also firmed over the week, with January 1999 contracts at £78.75/t. September 1999 futures rose as much as £1 to £81.50/t.

Despite the crisis in livestock markets at present, feed compounders cereal usage has so far been unaffected. But with numbers of stock expected to fall as the season progresses, a decline in feed usage of cereals could increase the volume available for export, noted the HGCA.