Wheat price prospects for farmers were looking ’more positive’ as the UK geared up for harvest 2017, according to Zoe Andrew, national key account manager at Frontier Agriculture.
Wheat prices were under pressure from three consecutive years of benign weather and high global production had seen ‘enormous’ stocks build up.
Mrs Andrew said this growing season had been ‘less than perfect’ in a number of countries, with US wheat production in particular at a 15-year low.
She said: “The high stock situation acts as something of a buffer to new crop production issues, but nevertheless, wheat markets have rallied strongly as a result of recent weather concerns.
“Coupled with this, a smaller expected UK wheat crop and strong domestic demand from consumers makes price prospects for UK farmers more positive for this coming harvest.
“The price of harvest wheat has moved up £15/t since the beginning of the year, improving farm margins for those locking into these higher values.”
As UK oilseed rape harvest started to get underway, early harvested crops were reported as good quality, with yields about 1.25t/ha (0.5t/acre) above last year.
First cuts from Bulgaria, Romania and southern France have also been reported as slightly better than average.
Jonathon Lane, trading director at Gleadell, said the rapeseed market was being ‘pulled along’ by volatility in the soy markets, with the threat of hot dry weather in the US Western Plains.
He said: “However, in Europe, we could see a season of two halves this year for the rapeseed market.
“Growers who need to move rapeseed during harvest should take advantage of this recent up-tick in prices, as the realisation of the main Northern European rapeseed crop, followed by the potential of a record US soybean crop, has the potential to take the gloss of this rally.
“However, if the heat in the US impacts significantly on the US soy crop, or there are real production issues in Australia, the European balance sheet could need to ration demand with higher prices later in the season.”