August 24, 2010

UK wheat futures remain firm

London's November wheat futures stayed close to GBP150 (US$231)/tonne on Monday (Aug 23) on the back of speculation about the likely grain import requirement of Russia and worries over harvest progress.

In UK, demand for feed wheat was relatively quiet towards the end of last week as compounders did their sums on least cost rations, said Gleadell in its weekly grain report. UK feed wheat remains export competitive but there is also new competition in that market.

The news that the German wheat harvest will contain a much higher proportion of feed grain than usual also has implications for producers here who have anything better than feed grain quality.

Homes for this grain may develop at relatively short notice as Germany's traditional milling wheat export customers are forced to look elsewhere, so it was important to have all grain tested as soon as possible, said traders.

Much of Eastern Europe is still struggling to cut wheat in poor conditions after heavy rain. In Western Australia, welcome rain has improved prospects for the winter wheat crop but more is needed.

All cereal harvest results in UK so far show yield slightly below five-year averages although wheat results are improving as more crops come off heavier land.