Wheat values turn a corner with uplift for futures contracts
© Tim Scrivener UK wheat prices have finally started to bounce back after having dropped by close to £40/t since the start of the year, though the outlook still remains bearish.
Feed wheat futures opened at £165.95/t on 28 February for the May 2024 contract, having made gains since bottoming out at £158/t last week.
New-crop prices also appear to have turned a corner, with the November 2024 futures contract up at £184/t midweek.
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Pressure from competitive Black Sea grain exports is still weighing on global markets, but tighter supply forecasts in the EU due to less favourable weather are offering some support, according to grain merchants.
Simon Wilcox, Cefetra farm grain origination manager, said there are some small indications that we have reached the bottom of the wheat market.
“We have seen the market try to rally, but so far this is short-lived. Europe, primarily France, and Russia are vying for the export business, which means there is a bit of a race to the bottom as neither are keen to have big carryout stocks.
“This could mean a further slip in values. This is offset in part by a slow increase in concerns about the potential harvest size, as the weather continues to affect spring drilling and the winter crops,” he added.
Less farmers selling
Spot prices collected by Farmers Weekly on 28 February stood at £158/t for UK feed wheat, the first increase on the previous week since mid-December. However, volumes of grain being sold from farms are still reportedly low.
Anthony Speight, AHDB senior cereals and oilseeds analyst, said: “Short covering by speculative traders supported wheat prices, plus slipover support from maize filtered into wheat.
“However, there was broadly pressure on Paris wheat futures as the Russian export price dropped, which, along with large global supplies, kept the focus on export competition.”