April 20, 2011
 

UK wheat futures increase again

Futures markets ascending again earlier today (Apr 19) with London feed wheat rising by up to GBP4/tonne (US$6.55) after a GBP5 (US$8.19) to GBP6.75/tonne (US$11.05) surge on Monday (Apr 18).

Dry conditions in Europe and cold weather in the US have combined to confirm the weather market for new crop.

This put feed wheat at GBP165/tonne (US$270) off the combine and GBP170/tonne (US$278) ex farm for November, said an analyst.

"It is all a weather market. Central France needs rain now and so do certain farms in Kent and the south east," the analyst added. Some crops on lighter soils were losing tillers.

"Heavier soils in the midlands and further north are fine but if we do not get significant rain by May 5-10, we have a real problem."

Cold weather in the northern US is delaying corn plantings, while snow and frosts in Canada are holding up wheat drilling there.

Figures from the German Farm Co-operatives Association added to the pressure. These forecast lower grain and oilseed production for harvest 2011 because of poor planting conditions in autumn, winter-kill and current dry conditions.

Total grain production is forecast at 44.1 million tonnes which is 100,000 tonnes down on last year's harvest. However, rapeseed production at 5.2 million tonnes is set for a bigger fall, down 500,000 tonnes on last year's harvest and 200,000 tonnes lower than estimates made in March.