Wheat prices slide in buyers market

By FWi staff

WHEAT values have plummeted with few traders able to see any sign of recovery in the near future.

Feed wheat prices dropped £3 to £70/t over the past few days and milling wheat matched the fall to end the week at about £88/tonne.

“Prices are coming down and I cant see any brakes on this slide,” one trader commented.

Mark Buckingham, economist of Banks Agriculture, warned some unlucky farmers may even see prices drop further.

Its a buyers market, and a very weak one at that, with the possibility that some supplies would be changing hands at £60-70/t, he added.

“Producers have realised that the good prices have gone and there is a need to clear stores resulting in relatively strong supply.”

The upturn could be some way off. There is plenty of wheat still to export and values could be driven lower by the need to remain competitive with other countries.

“If you get a good bid, then dont look a gift horse in the mouth,” said Mr Buckingham. “Be ready to load at short notice.”

The reason behind the price fall lies with a lack of UK competitiveness on global markets, said Gerald Mason, economist with the Home-Grown Cereals Authority.

French prices have also dropped, and UK values must match the fall if significant amounts of wheat are to be sold.

That means a further fall of £1-2/t is needed to put a floor in the market again.

With few robust signals of that happening soon, Mr Mason advises growers to have clear objectives when they want to sell at present.

“Watch the French market very closely and know why its so important to you,” he advises.

Robert Kerr of Glencore Grain blames the bear market on a recent oversupply of wheat.

With nothing sold for six weeks around Christmas, the market cant absorb the supply now, he said.

But farmers should be selling at the best attainable price if they have wheat to move over the coming months, added Mr Kerr.