Wheat price hope over drilling disruption

By Tamarind Davidson

CEREAL growers could be entering an 18-month marketing period as optimism over the new crop wheat price grows.

Drilling has been dogged by atrocious weather and concerns are rising about the size of the coming harvest. Only about 80% of the planned area has been sown so far.

This, coupled with worries over the US winter wheat crop, has underpinned new crop values, which now stand at 70-71/t ex-farm for November.

Speculation that prices might rise further due to shortages could tempt some farmers to carry old crop into next season.

“There has been much talk of this, and if it is the case the new crop marketing season starts from now and will continue for the next 18 months,” says Dalgetys Trevor Harriman.

Sowing concern and a lack of farmer selling have also helped support nearby prices. Ex-farm feed wheat is worth 65/t.

But Mr Harriman doubts the upward trend will continue.

“Sterlings easing against the Euro has also helped, but it could now be stuck in a new range. If so, and nothing else happens, we could have seen the best of values.”

Glencore Grains Angela Gibson agrees there has been much talk about carrying crop forward, but whether it will actually happen remains unclear.

“Wheat plantings are believed to be 20-30% down at the moment so supply will be much closer to demand,” says Ms Gibson.

“But growers are drilling even now, and unless there is considerable carry (monthly price increase) in the market they are unlikely to want to hold on to old crop.”

A substantial price hike in the new season is unlikely, but with new crop French wheat at a discount to domestic wheat, some areas of the UK could already be targeted for imports, she adds.