Cropping concerns in major growing regions have driven new crop UK wheat futures to a contract high.
Weather concerns in key growing regions including Australia, Canada and Russia pushed UK prices to 155.50/tonne on Wednesday (May 23).
AHDB analyst James Webster said in Australia conditions remained dry which was hampering planting and developing crops, with rainfall not expected in key regions.
There was also dry weather in Canada.
“While this is allowing planting of spring cereals to progress, rain will be required to enhance crop development,” he said.
“Looking ahead, there is only limited rainfall forecast in the Canadian Prairies in the next week.”
The Russian agriculture ministry has reduced its grain production forecast by 5 million tonnes, to 110mt, on the back of ‘challenging weather conditions’.
Cecilia Pryce, market analyst at Openfield, said: “Domestic UK markets have found themselves swept along with the positive price moves being seen globally.
“The surprise for many is that consumers continue to remain hungry, yet balance sheets have shown a tight situation for many months,” she said.
“Currency has not helped, with the pound and euro looking very weak against a firm US dollar.”
The rise has led traders to consider imports, which she said ‘should keep the lid on upsides’ alongside the anticipation of cheaper harvest values.
Crude oil prices were also impacting the market, increasing transport costs but making ethanol more attractive.
“This price spread could encourage further demand for ethanol and directly impact cereals as well,” she added.
“Milling premiums have also firmed as a few consumers are yet again found wanting in a marketplace where milling wheat has suddenly become hard to find."
She added lower premiums and relatively high claims on imperfections meant better quality wheat was moved as feed early in the season.
“New crop continues to eyeball global news while many growers in the UK are starting to look for a drop of rain which seems to be in limited supply," she said.