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Harvest Update - Wednesday 20th October 2004
UK Harvest
Wheat availability continues to be an issue with farmers being reluctant
sellers for a variety of reasons. Millers are still looking for quality
wheat for nearby delivery. The northwest market for bread wheat is up
about £3 this month in what is viewed as the highest priced segment
of the U.K. market. Other regional markets have also been steady with
general increases of £1 to £2 not uncommon over the past
10 days. Feedwheat values have also steadied with LIFFE futures rallying
about 6% this month.
U.K. feedwheat exports have benefited at the expense of continued Black
Sea logistical problems. Estimates are now circulating that U.K. export
shipments could be nearly 350,000 tonnes for the month, sustaining that
into 2005 could be a problem. Even with the good pace seen so far in
U.K. exports, there could still be another 2 million tonnes excess supply
for the first half of the new year. The LIFFE outlook from here could
be rather limited to the upside, barring a fundamental change in Black
Sea availability.
Milling quality wheat and feedwheat, however, will continue to trade
independently. Merchants are generally expected to need to buy milling
quality to meet previous sales. While November is usually a month of
increased farmer selling, in this difficult year this may not be the
case. For that reason we expect price volatility over the next few weeks.
Seeing no signs either that the quality issues surrounding this crop
will disappear, it will be interesting to see what the planted acreage
will be this autumn for next year, current estimates are that it will
be lower.
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