THE recent volatility we saw evident in the grain markets in the lead up to Christmas 2014 appears to have continued into the New Year.

Driven by currency fluctuations, politics and weather, values for old crop feed wheat have traded anywhere between £130/T to £140/T ex-farm for spot collection over the last couple of weeks. Current values are in the region of £135/T ex-farm for February collection.

The pre-Christmas rumours surrounding Russian grain exports have materialised this week and appear to be predominantly responsible for the ongoing volatility.

As of February 1, this year, the Russian government will impose a 15 per cent export duty on all wheat exports which, despite the weakening of their local currency (the rouble), has greatly aided the competiveness of European wheat supplies within the global market place.

Consequently, local ex-farm values had initially rallied although there are some discrepancies regarding the small print; how much of this season’s wheat crop has already been sold? Will this be subject to the export duty? How long will the charge be imposed for? We should have some answers to these questions over the coming few weeks.

Over in the Southern Hemisphere, winter wheat harvesting is almost complete in Australia and although results are disappointing, yields are for now said to be average.

Elsewhere, both Brazil and Argentina are due to begin harvesting maize corn crops in as little as two weeks’ time; this could add serious pressure to UK wheat values over the next couple of months.

Soybean harvesting is now well underway in Brazil and early results are encouraging. Regardless, the dollar is also strengthening against the euro at the minute making European supplies appear cheaper to foreign importers, hence the increase in local values over the last week or so.

£265/T ex-farm currently looks like a realistic offer for February collection; a value we have not seen since pre-harvest 2014.

Meanwhile, new crop wheat values are generally unchanged this week with September 2015 collection currently valued in the region of £140/T ex-farm. New crop feed barley is trading at a £12/T discount to feed wheat.