Wheat prices rise as UK gets more competitive

Competitive pricing on export markets has seen UK wheat values  rise again this week by £4-6/t.

A weaker sterling against both the euro and the US dollar made UK grain more competitive, taking the average ex-farm spot feed wheat price to £119.60/t on Wednesday (19 November).

The regional variation in prices put bids in a range from £116/t in Gloucester/West Midlands to £125/t in Yorkshire, with full spec milling wheat premiums averaging £37.60/t, while barley was at £111.80/t ex-farm.

The London feed wheat futures contract for May 2015 delivery stood at just over £131/t and November 2015 at £137/t by lunchtime on Wednesday.

US winter wheat growth is threatened by a cold snap while drought in Australia could reduce yields. Parts of Russia are also very dry while further military action in Ukraine added to uncertainty.

It was important to feed the market while demand was there, said David Doyle, head of exports and risk at Openfield.

“The UK has put itself at world prices and we are well placed in the world market,” he said. “It’s not bullish but there are opportunities.”

However, Mr Doyle warned that the market fundamentals had not changed and that there would be plenty of grain about – not much export business had been done into the new year as the expectation was for prices to stay flat or to fall.

While the pace has picked up recently, there is a lot of ground to make up on UK wheat exports.

The first GB plantings estimate has lent further strength – a drop in wheat area was widely anticipated and the HGCA survey has confirmed this at a 5% fall to 1.8m hectares, with winter barley up 12% to 476,000ha and the oat area down 13% to 118,000ha.

Oilseed rape is down 4% to 649,000ha and as expected pulses have gained 24% with an area of 171,000ha.

Across the EU-28 member states, the total wheat crop for 2015 is forecast by analyst Strategie Grains at 148.7m tonnes, a 4% drop.