UK FEED wheat values have come under pressure throughout the course of the last month or so and current values are now a long way down from the £140/T+ that was offered before Christmas.

Day-to-day price movement is volatile, but values have generally taken a downward turn over throughout the course of the last five weeks and £122/T ex-farm currently looks like a realistic offer for spot collection feed wheat. There are small premiums offered for farm-sellers looking to make commitments into the spring months but buyers appear to be reluctant to make large commitments at this stage.

Currency is predominantly responsible for the on-going volatility we keep seeing in the grain market and the more the pound strengthens against the euro, the more uncompetitive and poorly priced UK wheat becomes.

The recent imposition of a 15 per cent Russian grain export tax did initially give the UK wheat market some optimism but given the current strength of the pound against the euro, UK wheat currently looks expensive when compared to a European alternative.

Looking ahead, there are concerns for this year’s winter wheat crop across much of north and central Europe; the recent cold spell may be caused damage to winter wheat crops which had previously adapted to a rather mild winter. A cold spell across parts of Southern Russia and the Ukraine may also prove problematic, particularly given the rumoured lack of insulating snow cover there.

Again, new crop wheat values are volatile but £125/T ex-farm currently looks like a realistic value for September collection. Immediate movement off the combine would probably be valued at £2/T less than this.

Over in the Southern Hemisphere Harvesting is now well underway in South America and although we have not yet received any “official” indication of yields yet, key crop producing areas in both Argentina and Brazil appear to be on track for plentiful production this year despite some initial weather concerns. Brazil alone is expected to harvest a record 95 million tonnes of soybeans which, if realised, could add serious pressure to UK OSR values over the coming few months.

Current values are trading in the region of £250/T ex-farm for February/March collection – £20/T lower than values pre-Christmas but £20/T higher than values at harvest.