By FWi staff
WHEAT futures recovered from recent lows this morning. But the gain was immediately dismissed as profit-taking by traders.
Old-crop contracts climbed 75p to £75.70 (July). New-crop contracts climbed 50p to £77.25 (November) and £81.25 (January 1999).
But traders say the recovery is likely to be short-lived. According to Allied Grain, shippers are buying physical wheat and then hedging it on the futures market. Although prices have risen, hedging is bound to soon send market prices lower.
Other analysts echo that view. Gary Sharkey, trader with BDR Agriculture, said that profit-taking had helped spark a mini-recovery. But the Pounds strength continues to make UK wheat uncompetitive on the export market, he added.
Ex-farm bread wheat is currently trading at about £100/ tonne. Ex-farm feed wheat is worth about £68/ tonne.